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The Walmart Raises

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Walmart has announced a pay raise for its workers.

The company said it would pay even its lowest-level workers at least $9 an hour starting this spring, comfortably above the $7.25 federal minimum wage, and push that to $10 in 2016. The company also said it would strengthen a “department manager” role, giving it a minimum wage of $13 per hour this year and $15 next, thus offering low-wage hourly workers a clearer path to advancement. Including similar bumps at Walmart-owned Sam’s Clubs, the company expects 500,000 workers to receive a raise at a cost of $1 billion a year, executives said in a conference call with reporters.

This is why organizing efforts like the United Food and Commercial Workers’ campaign with the Walmart workers is so important. UFCW is rightfullly taking a good deal of credit for this. The bad publicity the company has received for its poverty wages, for holding food donation drives for its own workers, for making pregnant employees work with dangerous chemicals, and so many other awful corporate behaviors has made a difference. While the Times article linked above suggests this is Walmart responding to a tightening labor market, I am highly dubious that this is the only major reason for these raises. After all, it’s not like the early 2000s when fast food chains were offering signing bonuses for new workers. The labor market is still pretty bad for a lot of workers. Rather, it’s more likely that the fear of losing those workers to slightly better paying jobs combined with the need for Walmart to get some good publicity.

And as Mariya Strauss discusses
, this is very much a publicity move, part of a larger pattern of the company to make cosmetic changes in its business practices whenever the criticism of its practices generate particularly poor publicity. After all, it’s not like $10 an hour is some great shakes. In many states and municipalities, minimum wage law is moving to and above $10.

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  • djw

    Allow me to add that this would appear to be evidence that you and I were right and Kevin Drum was wrong. There is no downside to shaming image-conscious corporations for their terrible labor practices.

    • Oh Drum.

      I had forgotten about that. Gawd.

      • JL

        Rereading that Drum post, I’m newly confused about why anybody thinks that sample worksheet is realistic. I know Boston is expensive, but my household, which has a similar income these days (thanks teaching assistant stipend and crappy market for tech writers – good thing we had well-paying jobs for a few years first and could save money) spends almost 2.5x that on housing, and roughly 9.5x that on health insurance (grad student insurance really doesn’t like the idea of students adding a spouse).

        • Plus, there’s the fact that it starts with the assumption that McDonald’s the employee a consistent 40-hour week, which I understand to often not be the case.

        • Pat

          $10 an hour is a pretty decent wage in many parts of the rural South, where Walmart rules.

  • c u n d gulag

    The longest of leaps, often starts with the smallest of steps.

    Keep the pressure on the Plutocrats and Oligarchs!!!!!

    • Pat

      I think that the argument about how the government was supporting their business with welfare benefits to the tune of a billion dollars per store per year was a really strong one.

  • Brien Jackson

    I would say this is right; even amongst my various friends who think it’s crazy that a McDonald’s employee should make a living wage (because McDonald’s has no value to anyone but the CEO, naturally), there was palpable disgust for things like Wal-Mart’s food drives and just general shitty way they treat their employees.

  • Apparently I’m going to have to get up pretty early on a Saturday to scoop you, Erik. Good stuff, though. I would have put more emphasis on this: “In many states and municipalities, minimum wage law is moving to and above $10.” Walmart knows that the low wages have been politically damaging in a lot of municipalities it’d like to expand into, and it can afford to belly up to that $10 line better than some of its competitors. Likewise, I think they can see the writing on the wall – the minimum wage is going up to $10 sooner or later, so might as well get the credit and make the adjustment first. Same thing happened with the Affordable Care Act – Walmart didn’t mind getting on board because it could swallow the cost better than the competition.

    Reached out to Nelson Lichtenstein, who’s literally written the book on Walmart:

    Better late than never but it is not enough. As a federal minimum wage policy is effectively dead, we now have a series of regional wages.

    • Pat

      True, but all the states with shitty minimum wages have Walmart superstores.

  • Joe_JP

    A telling indicator that Walmart was feeling some sort of pressure (whatever the cause) was their ad campaigns in the last year or so to make themselves look so friendly to the employee and such.

  • LosGatosCA

    Sorry to have to take a completely different view on this. After decades of making moves that are substantively evil as well as PR disasters, WalMart has finally figured out a way to take a necessary business step and dress it up as something more substantial as a good PR move.

    My take is that they expect that there will be a rise in the minimum wage over the next few years and they might as well start adjusting now so that it isn’t a complete shock to the system when it rises to $10/hr. Plus, the CEO is being accurate when he says they adjust wages all the time. So in that sense, the only change would be how much more than the normal wage adjustment does this represent? Cynically, I expect that answer is quite a bit less than $1B. When I worked at GE they were really outstanding at dressing up normal, reactionary business decisions as game changing policy breakthroughs. This sounds like an echo of that strategy.

    • Pat

      True, but a 20% – 30% raise is still very nice to get. It might also help to push other large minimum wage operations in the same direction.

  • Spoffin

    “After all, it’s not like $10 an hour is some great shakes. In many states and municipalities, minimum wage law is moving to and above $10”

    You’re right of course that nobody’s living like a king on $10 an hour, but a wage increase IS going to make a real difference to a lot of Walmart’s workers and it will be in parts of the country where there’s no danger of state or local government raising the minimum wage by a buck and a half.

    • Brett

      It’s closer to the living wage in some of the poorer parts of the country as well, at least if you’re a young single adult.

  • shah8

    Man, I’d have thought someone else would have asked the natural question of how many hours of that $10 any worker would get.

    The bennies are more important.

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