In a surprise move, Walmart announced that they are raising the minimum wage for their workers to $9 per hour in April, rising to $10 per hour in February 2016. Walmart is one of the worst exploiters and abusers of its workers, paying low wages and subjecting them to poor working conditions.
Big business and the Republican party have been fighting efforts to raise the federal minimum wage above its current appalling level of $7.25 per hour (some states have higher rates) so why this change? One reason may be that the pressure exerted by advocates for raising the minimum wage has had some effect, generating bad publicity for these companies. Another might be that the improving economy may be making it harder for them to recruit and retain workers. Whatever the reasons, Walmart’s defection should weaken those opposing the rise in the minimum wage.
Of course, what is needed is for companies to pay a living wage, currently estimated at $15 per hour, and then peg it to inflation. Big business and its supporters argue that this will be bad for the economy because it will make them less competitive and thus cost jobs. The city of Seattle has in place a plan that will eventually raise the minimum wage to $15 per hour by 2017 for big businesses, starting with $11 in April, though that is being threatened by a state bill that would take away the power of cities to set minimum wages.
Walmart has truly earned skepticism for the totality of its business practices. The reports I’ve read lead me to belive that, soup to nuts, everything is geared towards squeezing every possible cent up the food chain. Raising the amount of base pay to front line employees is all well and good (not to discount that discrete positive impact), but I’d also be interested in hearing if they continue to manage hours worked to deny full-time status (and the benefits that brings), hours worked by exempt employees, squeezing suppliers — just to name a few of the tactics I’ve heard of. (NB: I am in no way associated with Walmart, so my views reflect reporting I trust, not personal experience).
As i understand it, $15/hr is roughly what the minimum wage was in the late ’60s, adjusted for inflation. It didn’t blow up the economy then (at least until the Vietnam war and the OPEC oil shocks did their damage), so why assume it would today?
First, as I understand it, it doesn’t apply to all employees. One commentator mentioned it might only apply to 40% of them. Being able to pick and choose gives Wally a lot of control.
Second, I wonder if this change isn’t the result of the executive finally apprehending the fact that wages paid are tax deductible.
lorn,
I think that 40% or people are currently paid less than the proposed wage and thus would be the only ones benefiting.
Raising wages is good. Giving employees enough hours to qualify for benefits (and not qualify for food stamps) would be much better.
I’d like to see Macy’s follow Walmarts lead. I love my job but the pay sort of sucks.
We’re doing well enough. Consistently profitable, no competitors in a great position to take advantage of our prices going up a little. We could afford it, the PR boost might even pay for most of the increase before we have to raise prices.
This move by Walmart might force Macy’s hand, though. We’ve got plans to open a discount chain. I don’t know the timeline on it, but basically something like a Marshall’s or TJ Maxx. We might have issues staffing it if we can’t compete with Walmart on pay(it’s not like we can choose locations to avoid them), and it would just look ridiculous if our discount people were paid more than our midmarket people(not to mention the associates at regular Macy’s stores fleeing for better pay from Walmart).
That hints to what I see as a potential big deal here- Walmart competes for sales with everyone else in retail- they sell at least a little of everything, and they are pretty much everywhere- and for employees with everyone else in retail. Especially on the staffing side, this really strengthens their hand and other companies may feel forced to respond. I’d expect to see a number of companies respond soon with increased pay and/or increased benefits.
Thus making it much more feasible for their employees – people who already come to the store a lot of the time – can afford to buy from the store.
So, they should welcome a mandatory living wage for all workers. That removes the “less competitive” non-argument, because attempting to undercut a living wage would be illegal.
Sounds to me like “big business and its supporters” are failing to read their Wall Street Journal:
The sooner we can ditch the Reaganomics faithful, the sooner everyone‘s situation can improve.