National minimum wage hikes set to take place in 2015 will affect the base salaries of workers at 1,434 Walmart locations in the United States, according to an internal memo examined by Reuters.
Hourly wages are set to rise in 20 states on or around Jan. 1, 2015, while pay rates in a few other states and the District of Columbia will also rise at later dates in 2015.
Stores that will be affected account for about one-third of the retail giant’s locations in the United States.
Walmart spokeswoman Brooke Buchanan said the company is making changes to ensure its stores in states with rising wages “comply with the law,” according to Reuters.
The retail company is the nation’s largest private employer, with about 1.4 million workers, so the rise in wages is not a minor issue. It keeps costs under close control and appeals to customers by offering low prices, but it operates on tight profit margins.
However, Walmart has had trouble in boosting its sales following the financial crisis, which caused lower-income Americans to lose jobs.
The memo reviewed by Reuters indicated an upcoming change in pay structure. Among changes include closing the gap in the minimum pay to employees with higher skilled jobs, such as department supervisors and deli associates, compared to lower skilled jobs.
The company’s three lowest pay grades will be combined into a single base rate. These three categories include cart pushers, cashiers, and maintenance.
“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,” said a manager who spoke on the condition of anonymity, according to Reuters.
Walmart has been criticized for paying its hourly workers inadequately, and labor groups have protested that it raises employee wages to at least $15 per hour.
There are currently less than 6,000 Walmart employees who receive the national minimum wage of $7.25 per hour, the company’s CEO, Doug McMillon, told reporters last month.
“In the world there is a debate over inequity, and sometimes we get caught up in that,” he told TV presenter Charlie Rose in a December interview.
McMillon also said the company is looking to pay all workers more than the federal minimum, although he did not provide figures of those paid minimums allowed by state law. Additionally, he said he would work toward ensuring Walmart is “a meritocracy, an opportunity for people to do more.”
Walmart estimates that the average hourly wage for its full-time workers is $12.92.
Without any knowledge of the number of Walmart employees affected by the minimum wage hikes, Edward Jones analyst Brian Yarbrough sad estimating the cost impact of the increases is difficult. He pointed out that while many workers may start off at minimum wage, pay rises with time.
Yarbrough also said the retail company will probably not resort to reducing staff or hours to balance out costs, as it has vowed to improve its store service.
Walmart saw a 3.5 percent increase in its operating costs in the most recent quarter because of bigger health care expenses and because it invested into wages.
Other businesses that will be affected by the upcoming wage hikes include retail company Target and fast-food chain McDonald’s.
A Target spokeswoman told Reuters she could not offer details on the number of employees who would be affected by new wages on Jan. 1, while McDonald’s could not be immediately reached for comment by the news agency. (With reports from CNN and Reuters)
(www.asianjournal.com)
(LA Weekend December 27-30, 2014 Sec. D pg.1)
