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What Happened When Walmart Raised Wages

Retailer bets big on the concept of 'efficiency wages'
By Daniel Kay,  Newser Staff
Posted Oct 23, 2016 4:02 PM CDT
What Happened When Walmart Raised Wages
A worker pushes shopping carts in front of a Wal-Mart store in La Habra, Calif.   (AP Photo/Jae C. Hong, File)

(Newser) – The New York Times has a deep dive on how Walmart bet big on its business by investing in its employees. In 2015 the retailer quietly implemented a new focus on employee welfare, increasing pay across the board and developing programs to make the management track more accessible to employees. Although the program hasn't helped Walmart's struggling stock price, it has allowed Walmart to increase sales, increase employee satisfaction, and claw back some trust and loyalty from consumers.

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According to its official fact sheet, Walmart pledged $2.7 billion over two years to increasing employee pay and benefits. The NYT reports that so far, the initiative has raised the average pay for a full-time non-managerial employee to $13.69 an hour, a 16% increase since 2014 and above average pay for retail employees. However, some business leaders and analysts remain skeptical. Writing for Bloomberg, columnist Megan McArdle notes that for a large, publicly held company like Walmart, profitability looms above all. If the company's renewed focus on worker welfare doesn't start paying real, quantifiable dividends, shareholders will push for it to return to a cheaper business model, even if that means relying on fewer workers. (Read more Walmart stories.)

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