Walmart Announces Higher Pay For a Half-Million Employees

EDISON, NJ–Walmart announced on February 19 that it would raise hourly wages for 500,000 of its employees.

The retailer said that all hourly employees would see their wages increased to at least $9 per hour by April and $10 by February 2016. Some store managers will get raises as well.

The move, called "a bold new initiative on pay and training for U.S. associates,” by Walmart CEO Doug McMillon in the company’s latest earnings release, will cost Walmart $1 billion and affect some 500,000 employees.

“Approximately 500,000 full-time and part-time associates at Walmart US stores and Sam's Clubs will receive pay raises in the first half of the current fiscal year,” reads the release, which points out the $9 per hour rate is $1.75 above the federal minimum wage.

"The following year, by Feb. 1, 2016, current associates will earn at least $10.00 per hour."

The raises come as part of a slew of changes to the company's hiring, training, compensation and scheduling programs, according to its CEO, as well as to the "store management structure."

"These changes will give our U.S. associates the opportunity to earn higher pay and advance in their careers. We're pursuing a comprehensive approach that is sustainable over the long term," said McMillon.

But a large Wal-Mart workers’ advocacy group, the Organization United for Respect at Walmart (OUR Walmart), is not satisfied with the raises and wants to see the company support its workers far more.

OUR Walmart last year organized a Black Friday protest at the Edison Walmart. Demonstrators demanded at least $15 per hour for all workers. The group coordinated protests at some 1,600 stores nationwide in the so called “Fight For Fifteen,” and also requested broader opportunities for full-time work, as opposed to part-time.

"We are so proud that by standing together we won raises for 500,000 Walmart workers, whose families desperately need better pay and regular hours from the company we make billions for," said Emily Wells, an outspoken Walmart worker and member of OUR Walmart.

"We know that this wouldn't have happened without our work to stand together with hundreds of thousands of supporters to change the country's largest employer," added Wells.

But, still, Wells and other advocates for higher pay and more full-time opportunities say it's not enough.

"As a soon-to-be-mom making only $9.50 an hour, it's very difficult to make ends meet with my part time schedule, which gives me only about 26 hours per week," Wells said in a statement.

"Especially without a guarantee of getting regular hours, this announcement still falls short of what American workers need to support our families," said Wells.  "With $16 billion in profits and $150 billion in wealth for the owners, Walmart can afford to provide the good jobs that Americans need – and that means $15 an hour, full-time, consistent hours and respect for our hard work."

OUR Walmart is supported by the United Food and Commercial Workers Union (“UFCW”), a union that represents largely supermarket workers.

Walmart does not like OUR Walmart's claim that it was created "by associates, for associates."

Ourwalmartfactcheck.com, a website sponsored by and operated by Walmart, claims that "the UFCW has paid people minimum wage to protest."

Marc Perrone, International President of the UFCW, also released a statement about Walmart’s initiative, calling the pay hikes "an important step forward for Walmart workers and their families."

"This is not an act of corporate benevolence. It would not have been possible without the courage of countless workers who are standing together, taking risks, and demanding wages and schedules that can support their families," Perrone said.

"Because of a strong and organized movement that includes many UFCW members, half a million Walmart workers will now get a raise. Because workers spoke out, $1 billion will now go directly into our economy instead of onto the Walton family’s balance sheet."

Perrone also said the announcement called into questions some of the company's "long-term inconsistencies about its wage claims."

"Even ten years ago it claimed workers were paid an average of $10 an hour. High turnover leaves the vast majority of Walmart workers toiling at the lowest wage scales which will now pay at least $9 an hour. We know that Walmart can and should do better."

Perrone said the announcement of higher pay for Walmart workers was both a "victory" as well as "a call to action for the UFCW and the entire labor movement."

"The largest private employer in the nation is feeling the pressure to do better for its workers. We must seize this opportunity and keep fighting until every single worker – in retail stores, supermarkets and beyond – is paid a living wage."

With the economy improving, Walmart's wage announcement is reportedly putting pressure on McDonald's and other low-wage employers to follow suit.

Some financial analysts expect the higher pay rates will spill over into other companies such as Staples and Target, and even other industries, like fast food.

"McDonald's Corp. and its franchisees may have few options but to begin raising hourly wages as an improving U.S. economy creates competition for good workers and as mega-employer Wal-Mart Stores Inc. sets a higher bar on pay, according to labor experts," reads a report from Reuters.

Gary Chaison, professor of industrial relations at Clark University in Worcester, Massachusetts, told Reuters that there is substantial overlap between fast-food and Walmart workers in smaller communities.

Walmart's pay hike represents a victory for many. However, economists say the move merely reflects an improving U.S. economy in which more than a million jobs have been added over the past three months.

"It's finally happening. The strengthening economy is putting some upward pressure on wages," Wally Hopp, a professor at the University of Michigan's Ross School of Business, told Reuters.

PNC Financial Services senior economist, Gus Faucher, told the news service that Walmart's move marks a turning point.

"Walmart tends to be on the lower end of the pay scale, so you're looking at other retailers and fast food restaurants. It's those types of places that hire generally unskilled labor," said Faucher.  "I think we'll see increasing pressure on businesses throughout the economy to raise wages in order to retain workers."

Faucher said that businesses will likely raise prices, but that consumers will also have greater buying power.

“Higher wages do two things: push restaurants to raise menu prices and give consumers more money to spend at restaurants and other places."

Dave is an award-winning business reporter who has authored over 200 articles for New Brunswick Today.