Back in its 2007 fiscal year, before the recession, Walmart reported $183,500 in revenue per employee and $5,938 in profit. Not bad, but by 2014 those numbers had risen 18 percent and 22 percent. The company's sales and profits rose nicely in that time while the company kept a lid on its payroll. Gains went to Walmart shareholders, not Walmart workers.
So what has changed? The simple answer is that the world for employers is very different with a 5.7 percent unemployment rate (the January level) than it was five years ago, at 9.8 percent. Finding qualified workers is harder for employers now than it was then, and their workers are at risk of jumping ship if they don't receive pay increases or other improvements. Apart from pay, Walmart executives said in their conference call with reporters that they were revising their employee scheduling policies so that workers could have more predictability in their work schedules and more easily get time off when they needed it, such as for a doctor's appointment.
The giant question now is not whether there will be some meaningful wage gains in 2015; beyond the anecdotal evidence from Walmart and Aetna, the collapse in oil prices means even modest pay increases will translate into quite large inflation-adjusted raises. The question is whether wage gains will be strong enough to create a virtuous cycle in which rising pay for the workers at the bottom three-quarters of the income scale, who are most likely to spend the money and get it circulating through the economy, will spur more investment and hiring.
To the degree their logic was, "We think we're going to need to raise wages this much in the next couple of years anyway to retain good workers and maximize profitability, so we may as well get ahead of the curve and get a public relations bump out of it and announce the plans in a big splashy way," that would be the best news for American workers. Because that would imply that it won't just be Walmart workers getting a raise in 2015."Walmart's Overdue Pay Raises, Neil Irwin, NY Times, Feb. 22, 2015 http://www.nytimes.com/2015/02/20/upshot/as-walmart-gives-raises-other-employers-may-have-to-go-above-minimum-wage.html
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