Walmart’s Wage Increase Renews Minimum Wage Debate

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Nearly a half million workers in the United States will see a pay increase in April.

Walmart, the world’s largest retailer, announced today that it was raising the base pay of its current and future employees to $9 an hour, a full $1.75 above the current national minimum wage.

According to the company:

Approximately 500,000 full-time and part-time associates at Walmart U.S. stores and Sam’s Clubs will receive pay raises in the first half of the current fiscal year. Current and future associates will benefit from this initiative, which ensures that Walmart hourly associates earn at least $1.75 above today’s federal minimum wage, or $9.00 per hour, in April. The following year, by Feb. 1, 2016, current associates will earn at least $10.00 per hour.

The company has been the target of nationwide protests among its workers seeking higher wages and unionization. The latest move is seen as heading off growing angst among its employees, many of whom only make either the $7.25 federal minimum wage or their state’s minimum wage.

Walmart has struggled in recent years amid stiff competition and a rapidly declining return on investment. The move to increase worker salaries is aimed at boosting worker productivity. It is also sure to stir the minimum wage debate in the United States, where the federal minimum wage has not seen an increase since 2009.

Time magazine looked at the real value of the minimum wage, which has decreased significantly since the 1960s due to inflation.

Time-mag-chart

Congressional Democrats have proposed raising the minimum wage to $10.10 an hour and pegging future increases to inflation. Senate Republicans blocked an increase of the federal minimum wage last year. The lack of progress in Congress has left cities and states to address the issue on their own.

Chicago became the largest city in the United States to pass a $13 minimum wage, which will slowly be phased in over the next four years. Seattle will see a $15 minimum wage beginning for large businesses in 2017. San Francisco will also gradually make the jump to $15 an hour.

Voters overwhelmingly approved minimum wage increases in Republican-leaning states such as Alaska, Arkansas, Nebraska, and South Dakota in the 2014 elections.

For his part, President Obama mentioned the Walmart wage increase in a speech today, saying that it provided an opportunity for Congressional Republicans to get on board legislation that would increase the federal minimum wage.

As for Walmart, the company says that the wage increase will only cost around $1 billion in the first year, a small price to pay for a multi-national corporation whose annual revenue approaches $500 billion.

Image Credit: Mike Mozart, flickr

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