According to market analysts, Wal-Mart`s decision to increase the wages of 500,000 staff from April is going to have an ripple effect on many industries and States across America. They said, Wal-Mart`s decision last week to pay at least $9/hour to their staff, which is $1.75 above federal payment have already have an impact in other industry.
According to market experts retailers are finding it hard to retain and find good entry level staff from April. In a statement last week Wal-Mart CEO Doug McMillon said, “These are strategic investments in our people to reignite the sense of ownership they have in our stores. As a result, we firmly believe customers will benefit from a better store experience which can drive higher sales and returns for shareholders over time”.
In recent times Wal-Mart had struggled to retain and hire new staff, after another retail giant GAP increase their minimum wages to $9/hr last year. They also promised to increase it to $10/hr in 2015. After Wal-Mart`s decision last week Wal-Mart now have the one of the highest staff turnover level in USA.
Wal-Mart`s decision on pay hike is now one of the major talking points among other retail giants. In a recent interview with a local Media TJX, owner of budget chain TJ Maxx (TK Maxx in U.K.) pledge to increase their minimum wage level. They said, they will increase the hourly pay to $9 in June and $10 from 2016. TJ Maxx CEO Carol Meyrowitz said: “This pay initiative is an important part of our strategies to continue attracting and retaining the best talent to deliver a great shopping experience for our customers, remain competitive on wages in our US markets and stay focused on our value mission”.
Another discount retailer Dollar Tree (DLTR) said, they have no intention of following Wal-Mart. When asked about the pay hike their CEO Bob Sasser said, “We watch the industry trends carefully, and of course, we’re compliant with all the state and federal regulations. But I’ll tell you, outside of complying with the continued changes in the regulations, we’ve made no plans for a sweeping change to our minimum wage rates. But we will continue to pay competitive wages, market by market, just as we always have done based on the prevailing rates”.
Wal-Mart`s decision also have an effect on some States, Andrew Cuomo, Governor of New York State, said all waiting staff and other staffs whose wages are supplemented by tips, will have a pay rise. He also confirmed that, by the end of this year he wants to make their minimum wage $7.5/hr. Chicago also increasing the minimum wages from $8.25 to $10 an hour from July and $13 from 2019. According to Federal law the minimum wages across USA is $7.25 since 2009. Barack Obama want Congress to increase it into $10.10/hr.
