Walmart Raising Minimum Wage: Is it a PR Scheme?

In February Walmart announced that it would be raising it's minimum wage for all U.S. facilities to $9.00/hr, which is 24% higher than the federal minimum wage. In one of my earlier posts, I expressed my concern that this was a PR scheme to get the media off of Walmart's back for a little while. Although many may argue that this is untrue, now that the raise has officially taken place, my feelings about the raise are still there. Forbes makes an interesting case as to how this was just an act for good publicity. Forbes illustrates how although Walmart claims it'll have a massive effect across the company, the wage increase will only effect a small percent of Walmart's employees.

Burtless, a writer for Brookings.com, expressed his concerns that the wage increase means that inflation is just around the corner. The video below is from Slate, and suggests that shoppers will only see about a 1¢ per item price increase to account for wage increases, however, it neglects to point out that Walmart is a huge part of the U.S. labor economy, and this wage increase could cause a market-wide wage increase.

My next concern with the wage increase was that Walmart would be cutting it's benefits. Although this isn't completely true, there is still some validity to my concerns. I previously mentioned how there were pay levels (1-7). With the pay increase, levels 1-3 will now all be making the $9.00 wage, and any associates who were already making more than $9.00 will only receive a 2% increase (for most associates this ends up being about $0.20). Then there are associates like me, who have an annual evaluation raise that increases their wage $0.40 higher than a new-hire of the same position. Essentially, I've lost my evaluation raise because I'll only be making $9, which will be the same as a new-hire (with less experience). Don't get me wrong, I'm happy that I'll be getting an additional $0.60/hr, I'm just a little discouraged that I'll be making the same as an associate with a year less experience than me.

Next, a $9.00/hr wage is still not a living wage. A part-time employee making $9.00/hr is still only making about $25,000. According to The U.S. Department of Health & Human Services, this is still below poverty level.