By Stephen Gandel
June 25, 2014

Wal-Mart wants the world to know I can’t add.

On Monday, David Tovar, the giant retailer’s director of communications, wrote in a blog post on Wal-Mart’s corporate website that Fortune.com and I were not credible sources of information. Later, on the phone, Tovar clarified what he was trying to say.

“Your math doesn’t make any sense,” said Tovar. “It’s ludicrous.”

Clear enough.

Over the weekend, The New York Times published an article by columnist Timothy Egan that called Wal-Mart “the nation’s most despised retailer.” Egan said that the company’s “poverty-wage structure” has made the firm and the Waltons, its founding a family, a fortune at the expense of its workers and U.S. taxpayers. “Working at Walmart may not make you poor, but it certainly keeps you poor—at the expense of the rest of us,” wrote Egan.

Wal-Mart published a blog post by Tovar on Monday that included an annotated version of the Times article. In red pen, Tovar circled, underlined, and wrote snarky comments refuting many of Egan’s points. At the top, Tovar wrote, “Thanks for sharing your first draft.”

How did Fortune and I get caught in the crossfire? Egan’s article in the Times cited a piece I wrote back in November in which I calculated that Wal-Mart (WMT) could significantly increase what it pays its employees without raising prices or denting its stock price. If my piece was wrong, Wal-Mart never let me know. They declined to offer a comment for that article. After it came out, no one from Wal-Mart ever called asking for a correction or to point out anything in the article that may have been wrong.

But on Monday, in Wal-Mart’s annotated Egan piece, the company underlined my name and wrote, “Confirm credibility of source? Consider economist Jason Furman – great resume.” There was also a link to a story that Furman wrote for Slate.com that didn’t work.

Furman does have a great resume. (And mine’s not that bad.) He’s the head of the White House Council of Economic Advisers. I can’t find an article on Slate—or anywhere else—in which Furman refutes my math on Wal-Mart’s wages.

Back in 2006, Furman did write an article for Slate saying Wal-Mart doesn’t get enough credit for its low prices, and how that helps the hundreds of millions of Americans who shop there. As for whether Wal-Mart stiffs its employees, Furman said the jury was still out. “What we do know is that [Wal-Mart’s] wages and benefits are about average for the retail sector—which is to say, not so great.”

In the same piece, Furman also wrote, “I believe that Ben Bernanke and the Federal Reserve decide the total number of jobs nationwide.” That’s probably something, given what’s happened since, Furman would like to take back. I called the White House to see if Furman’s thoughts on Wal-Mart’s wages had changed, but I received no response.

As for my math, I ran through my calculations again to see if I had made an error. I didn’t find one.

Last year, Wal-Mart brought in a little over $118 billion in profits after it paid its suppliers but before it paid wages. Like all companies, it has to split that money three ways, between its stock owners, its lenders, and its employees. Wal-Mart paid  about $2 billion in interest on its loans last year, leaving $116 billion.

It is pretty well established in finance that you can approximate the return stock holders are looking for when they invest in a company. The average retailer has a return on equity of about 20%. Their shares trade at a price-to-book ratio of 3.2. Wal-Mart’s shares, at a recent price of $75.80, have a price-to-book ratio of 3.4. So investors are looking for roughly the same return on their investment. Factor in dividends and Wal-Mart’s return on equity should be about 17.5%.

Wal-Mart had $76 billion in shareholders’ equity at the end of last year. Take 17.5% of that, and you get a little over $13 billion. That’s what investors are looking to get paid.

That leaves Wal-Mart with $103 billion to pay its roughly 2.2 million employees. Of those, about 1.4 million work in the U.S. Assume that Wal-Mart spends about two-thirds of that on the salaries of its U.S. employees, because salaries are generally higher here. That leaves $69 billion for the U.S. workers, or $49,285 per person.

The Bureau of Labor Statistics estimates that 30% of the average U.S. workers’ total compensation is spent on benefits. That means the average Wal-Mart employee’s annual take home pay should be $34,500. Two years ago, Payscale estimated the average annual salary to be just over $22,000. That’s how I concluded that Wal-Mart could afford to give its staffers a 50% bump.

But Wal-Mart says its average annual salary is more like $25,820. But even using that figure, Wal-Mart could afford to boost the average pay of its workers by a third, or nearly $9,000 a year.

Is Wal-Mart going to? It doesn’t look like it. Lots of people are taking income inequality in America seriously these days. That’s what Egan’s column was about. The fact that Wal-Mart responded with a snarky PR-stunt shows that the company does not take the notion of fair wages for its workers seriously at all.

Indeed, in the past year, much of Wal-Mart’s response to the criticism that it stiff its workers has been centered around PR tactics, and it appears to be ratcheting up that effort. Top Wal-Mart spokesperson Tovar said this is the first time Wal-Mart has annotated an article. I told Tovar that since Wal-Mart was now getting into the media game, my editor wanted to let him know that Fortune is thinking of getting into retailing. Tovar said Wal-Mart welcomed the competition.

For this article, I once again asked to speak to someone in Wal-Mart’s finance department to have a serious discussion about my calculations. They refused. Instead, I got this from Tovar: “We pay above market wages (true!), our benefits are better than the retail average and because we provide more opportunities than any other retailer in the country (we promoted more than 170,000 people last year.)”

But Wal-Mart should provide above-market wages and benefits and opportunities to its workers. It is the most powerful retailer in the richest nation in the world. And Wal-Mart has 2.2 million workers. The fact that less than 8% of those employees earned a promotion last year is nothing to be too proud of.

Tovar ended our e-mail exchange with this, “Since Fortune is starting a retail operation, maybe you should ask Andy [my boss] if he’s going to increase your salary by 50%. I’m sure Time Inc. can afford it.”

Zing, I guess. But I don’t make minimum wage, or anywhere close to it. Neither do even the most junior reporters at Fortune. America deserves better.

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