New State Minimum Wage Laws will Force Walmart to Raise Salaries in 1/3 of Stores
Increases in the minimum wage in 21 states that will go into effect in the new year will mean that some Walmart employees in a third of the company’s U.S. stores will get raises.
Don’t worry about Walmart though. They’ve figured out a way to force other low-paid employees to make up for the increased labor costs in those 1,434 stores. A memo sent last month to store managers shows that the company will narrow the wage gap among its hourly employees, paying less for more skilled workers. “Essentially that wage compression at the upper level of the hourly associate is going to help absorb that cost of the wage increase at the lower level,” a Walmart manager, who spoke on condition of anonymity, told Reuters.
Even with the minimum wage increase for some, those earning at that level are still in poverty and often dependent on public assistance to make ends meet.
The company has said it would re-evaluate its wage structure in 2015, possibly even giving raises to those employees still at the federal minimum wage of $7.25 an hour. Research has shown that even if the retailing giant were to raise its wages to the proposed federal minimum of $10.10 an hour, it would have to raise prices only a tiny bit, according to ThinkProgress.
Walmart has seen its labor expenses rise, going up 3.5% in the most recent quarter. Analysts say the company is unlikely to reduce headcount to counter that trend as it attempts to improve customer service.
To Learn More:
U.S. Minimum Wage Hikes to Affect 1,400-Plus Walmart Stores (by Nathan Layne, Reuters)
A Third of Walmart Stores in the U.S. Must Raise Base Wages In 2015 (by Aviva Shen, ThinkProgress)
Judge Tells Walmart It Illegally Punished and Intimidated Workers (by Ken Broder, AllGov California)
Walmart Forces Employees to Buy New Uniforms…at Walmart (by Noel Brinkerhoff, AllGov)
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