Wal-Mart has been a target among liberals for quite some time.The 2005 film, “Walmart: The High Cost of Low Price,” blasted the retailer for paying low wages ($17,000 a year at the time of production), among many other charges. The retailer has been a favorite target of unions and minimum wage advocates ever since.
Whether it be caving to public pressure or a new business strategy, the Wal-Mart of today is no longer your father’s Wal-Mart. As BusinessWire reports:More than 1.2 million Walmart U.S. and Sam’s Club associates will receive a pay increase under the second phase of the company’s two-year, $2.7 billion investment in workers. The pay raise, which takes effect Feb. 20, will be one of the largest single-day, private-sector pay increases ever
The changes taking effect include:
- All associates hired before Jan. 1, 2016 will earn at least $10/hour.
- New entry-level associates hired after Jan. 1 will continue to start at $9/hour and will move to at least $10/hour after successfully completing the company’s new retail skills and training program known as Pathways.
- Associates already earning more than $10/hour will receive an annual pay increase in February rather than waiting until their anniversary date.
- Walmart is raising the starting rate of its non-entry level hourly pay bands. Anyone earning below the new minimum will automatically move up to the new minimum.
- Associates at or above their pay band maximum will receive a one-time lump sum payment equal to 2 percent of their annual pay.
- When these changes go into effect, Walmart’s average full-time hourly wage will be $13.38/hour. The average part-time hourly wage will be $10.58/hour.
This, of course, isn’t to say these wage hikes aren’t without cost. Wal-Mart saw a decline of earnings per share of 10% last quarter following the first phase of their pay increases.Additionally, because Wal-Mart is now paying relatively high wages, that doesn’t mean that it would’ve been wise to force them to do so through raising the minimum wage. Wal-Mart also closed a store in LA to avoid paying its forthcoming $15 an hour minimum wage, so voluntary wage hikes are preferable to mandated ones.
[Note: This post was authored by The Analytical Economist]