Wal-Mart Wage Hike Gets Mixed Reaction

Retail

Published: February 19, 2015 2:38 pm

Last Updated: April 28, 2020 9:31 am

When Wal-Mart Stores Inc. (NYSE: WMT) announced earnings Thursday morning and said at the same time that it would raise its hourly wages for full- and part-time associates, we can certainly be forgiven for asking whether the workers who have been striking and holding other job actions at Wal-Mart stores are winning their fight for higher wages.

A union-backed workers group called Our Walmart has held job actions on the Black Friday holiday shopping weekend at Wal-Mart stores for the past three years. The group is demanding a minimum wage of $15 an hour and more full-time jobs, and while it is pleased with Wal-Mart’s announcement, a spokesperson said that the increased wages are not enough to support workers’ families.

A statement from the Employment Policies Institute touts the value of operating in a free-market economy:

Walmart’s decision to increase its store minimum wage to $10 an hour exemplifies how wages rise in a free economy: by choice, not by government mandate. Just because a $10 minimum wage is the right choice for Walmart, however, does not mean it should be mandated for all other businesses, regardless of industry or size.

The Employment Policies Institute is operated by Washington, D.C.-based public relations firm Berman & Co., according to SourceWatch, and is not, as is often inferred from the name, a think tank.

Wal-Mart’s action Thursday will be welcomed by the company’s lowest-paid workers, but its value to the U.S. economy is primarily symbolic. CNBC has reported that at a very generous estimate of 30 hours per week and 52 weeks a year for every one of its workers, Wal-Mart’s total cost for the pay hikes adds about $1.5 billion to a U.S. wage base of $7.5 trillion.

Wal-Mart is almost certainly not changing its long-standing policy of beating back union organizing efforts in any way that it can. But rather than brandishing a big stick, this time the company has chosen to offer a stick of candy.

Investors continued to sell the stock Thursday, driving the price down by around 2.7% to $83.98, in a 52-week range of $72.61 to $90.97.

ALSO READ: Customer Satisfaction Lowest at Wal-Mart, Highest at Nordstrom and Amazon

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