With the coronavirus pandemic wreaking havoc on the US economy, Democratic legislators have pushed to add a law doubling the federal minimum wage into a recently proposed stimulus bill aimed at easing some of the economic hardship that many Americans have faced during the pandemic.
One company in particular, Walmart, has taken the initiative of raising its average pay for over 425,000 employees to a little over $14 an hour. However the company’s minimum wage to start will remain $11 an hour. The move by the retail giant is not an endorsement of the Biden administrations $15 an hour proposal, but management was quoted saying that they support an increase in the federal minimum wage, just not to $15 an hour.
Walmart employs 1.5 million people, accounting for a little over 1% of the US workforce. Any wage growth or employment initiatives that such a large company pursues can be seen as the new industry standard. And with the minimum wage debate receiving heightened attention, Walmart is being used as an example for both ends of the political spectrum. Democrats believe that Walmarts large wage increase is proof that company’s can and should raise the minimum wage. Republicans believe that the increase is proof of the invisible hand of the market, showing that further government intervention in private companies is overkill.
This article brings up questions about why a company would move to increase wages without a government mandate, as well as some about whether or not a higher federal minimum wage is needed. Walmart may be getting praised for raising the average wage for 425,000 workers, but does that necessarily mean that they did it because they believe there needed to be a change in retail wages? Grocery store retailers like Walmart performed especially well throughout the pandemic and this is evident in Walmarts earnings. In the third quarter of 2020, Walmart’s earnings increased 5.3% from the same time last year to $134 billion at the height of the pandemic. Did the company make a bold, progressive move? Or were these wage increases just in line with the massive revenue increase?
The article also contributes to the debate about whether or not a federal minimum wage increase is necessary. While Walmart may be able to raise wages, how would small and even medium businesses fair after being hit so hard over the past year? And on the flip side, is Walmart really evidence of a change in industry? Just because one large retailer experienced massive earnings increases and decided to raise under a third of its wages by a maximum of $3, doesn’t mean that the market is self regulating to benefit the average American worker. Overall I think that this sheds light on the responsibility that corporations have, especially in times like this, to provide fair wages for employees. Companies of similar size and earnings history should take note of Walmarts initiative and recognize that if you can, you should.