RETAIL giant Walmart announced Thursday, Feb. 19, that it will raise pay for 500,000 employees, among a number of other changes that are expected to benefit workers, customers and the business.
“We’re making changes to our pay, strengthening the opportunity to progress within the company and offering more choice in scheduling,” said Walmart CEO Doug McMillon in a video to associates. “One of the most immediate changes, is that we’ll raise our starting pay and we’ll provide further opportunities for raises based on performance.
By April of this year, Walmart will raise the entry wage for its current associates to at least $9 per hour; by February 2016, all its associates will earn a minimum of $10 per hour. Newly-hired associates will start at $9 per hour training wage and will receive $10 per hour upon successful completion of the six-month onboarding and training programs.
Once the changes are implemented in April, the average full-time hourly wage will be $13 per hour (up from $12.85), while the average part-time hourly wage will be $10 per hour (up from $9.48). The figure for full-time workers remains below the $14.65 hourly average that retail workers in non-supervisory roles earn.
The announcement was one commended by many, including Lisa Pietro, 57, a produce worker at Walmart in Winter Haven, Fla.
“I’m excited about it,” she said, according to The Guardian. “It pleased us, but they haven’t pacified us yet.”
As a part-time employee earning $8.95 an hour, Pietro said the raise to $9 wouldn’t do much for her, although the raise to $10 by 2016 would help her.
Nelson Lichtenstein, an author of two books on Walmart and a labor historian at the University of California, Santa Barbara, echoed Pietro’s stance on the retailer’s wage raise.
“This is a good thing, but I don’t see it as a breakthrough,” he said, according to The Guardian.
The author also said the pay raise would still leave many part-time employees in poverty. For an employee working 25 hours per week at $8.50 an hour, for instance, a raise to $10 per hour equates to earnings of $250 per week or $13,000 annually, up from the current $212.50 per week or $11,050 per year. These amounts would still leave workers dependent upon food stamps and Medicaid.
“Increasing hours is what’s really needed to increase take-home pay,” Lichtenstein said, according to The Guardian. “If they moved a substantially higher percentage of workers to 40 hours a week at a starting wage of $10, that would make a difference.”
Walmart’s pledge to raise pay, however, reflects a tightening labor market and increasing competition for lower-paid workers; additionally, it could signal a pivotal point for wage growth following weak gains since the economic expansion began nearly six years ago, according to The Wall Street Journal.
“Their action could create a floor under wages and others may need to follow in order to retain and attract workers,” said Joel Naroff, chief economist at Naroff Economic Advisors, according to the Journal.
Some observers say Walmart announced the pay increase also as a response to lagging business performance and nationwide protests demanding higher wages.
Although Walmart’s move is a big deal, it is only a first step, said Thomas Kochan, a professor of industrial relations at the Massachusetts Institute of Technology’s Sloan School of Management, according to The Guardian.
“There’s going to be more. They’ve now acknowledged that they’re a low-paying company, and once you start raising wages a bit, you’re going to face a lot of pressure to do more,” he said.
Other changes Walmart is making include the launching of development programs in 2015 that will assist associates in moving up from entry level jobs to positions with more responsibility that pay $15 per hour or more.
“When we take a step back and think about our future, it’s clear to me that one of our highest priorities must be to invest more in our people this year,” McMillon said. “We want to reward associates for their service to our customers and improve the customer experience in our stores.”
The company is also piloting a program that offers some associates fixed weekly schedules to allow for more predictability in their hours and paychecks. The program is expected to expand by early 2016.
Furthermore, Walmart is looking to eliminate the one-day waiting period for sick leave by 2016. The company and the Walmart Foundation are also investing $100 million throughout a five-year period into programs that enhance the economic mobility for entry-level employees by advancing their careers, in order to promote a stronger workforce, according to a Walmart fact sheet.
(With reports from Associated Press, The Guardian and The Wall Street Journal)
(www.asianjournal.com)
(LA Midweek February 25-27, 2015 Sec. B pg.1)
