Walmart recently announced that it is making a bold new move in terms of its employee wages and structuring, drawing attention to the issues of retail staffing from many quarters. The retailer will raise the baseline wage of current store employees in two stages, to $9 per hour in April and then to $10 per hour by February 2016, meaning that an estimated 500,000 workers will see a raise.
The move is one that could have a significant impact on the minimum wage debate and help the tarnished image of the retailer recover, according to the Huffington Post.
Other retailers have already made the investment in its workforce, including Gap and IKEA, but Walmart’s enormous labor force has unique implications.
In the company statement, Doug McMillon, Wal-Mart Stores, Inc. president and CEO , explained: "Today, we announced comprehensive changes to our hiring, training, compensation and scheduling programs, as well as to our store management structure. These changes will give our U.S. associates the opportunity to earn higher pay and advance in their careers. We're pursuing a comprehensive approach that is sustainable over the long term."
"By realigning our store operational structure, associates can enjoy a closer relationship with their supervisors. In addition, associates will have more control over their schedules. The investment in these initiatives is more than $1 billion for this fiscal year."
One factor that has driving Walmart and other retailers to raise their wage scales is a growing demand for labor in the retail marketplace. According to the New York Times, with the unemployment rate now at 5.7 percent, down from 9.8 percent five years ago Walmart has experienced difficulties retaining employees in a job market where its competitors like Costco Wholesale offer better wages.
This move by Walmart could simply be a sign of things to come, with the minimum wage debate raging and competition among retailers fierce to capture the loyalty of their customer base.
“We’re finally going to see a wage creep, and Walmart is trying to get out in front,” Ann C. Hodges, a labor relations expert at the University of Richmond, told the New York Times. “They’re thinking: We’re probably going to do this anyway.”
According to Walmart spokespersons, its part-time workers already earn an average wage of $9.48, and full-timers an average of $12.85.
Although Walmart lags behind major retailers like Gap and Ikea, which have set hourly wages at or above $9, or Costco, known to offer wages closer to $20 an hour, the decision by Walmart could force other major retailers like Target and Home Depot to follow suit. According to PayScale, a company that collects data on salaries, Kroger pays its cashiers $7.26 to $11.99 an hour, while Target pays its cashiers $7.42 to $10.09, and Home Depot pays its sales associates $7.90 to $11.16.
“Wage increases could be imminent for other companies,” Oliver Chen, retail analyst at Cowen & Company in New York told the New York Times.
"Sam Walton knew that an inspired, dedicated team of associates was the way to exceed our customers' expectations," McMillon said in the release. "He often said 'Our people make the difference.' I feel a big responsibility to carry on what that phrase represents: the care and commitment that Sam had for Walmart associates."
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