Walmart's Pay Raises Have Helped


tay
#1
This is, after all, a company famous for squeezing pennies so successfully that labor groups accuse it of depressing wages across the American economy. As an efficient, multinational selling machine, the company had a reputation for treating employee pay as a cost to be minimized.

But in early 2015, Walmart announced it would actually pay its workers more.

That set in motion the biggest test imaginable of a basic argument that has consumed ivory-tower economists, union-hall organizers and corporate executives for years on end: What if paying workers more, training them better and offering better opportunities for advancement can actually make a company more profitable, rather than less?

It is an idea that flies in the face of the prevailing ethos on Wall Street and in many executive suites the last few decades. But there is sound economic theory behind the idea. “Efficiency wages” is the term that economists — who excel at giving complex names to obvious ideas — use for the notion that employers who pay workers more than the going rate will get more loyal, harder-working, more productive employees in return.

Walmart’s experiment holds some surprising lessons for the American economy as a whole. Productivity gains have been slow for years; could fatter paychecks reverse that?

And it said it would raise its hourly pay to a minimum of $10 for workers who complete a training course and raise department manager pay to $15 an hour, from $12. It said it would offer more flexible and predictable schedules to hourly workers.

The news from Bentonville made headlines worldwide. The federal minimum wage had been $7.25 since 2009, and the labor market had awarded meager pay gains for people at the lower end of the spectrum for decade, facts that helped increase Walmart’s bottom line. Now, the United States’ largest private employer — Walmart has about 2.3 million workers around the world — was signaling it was about to gingerly try a different approach, putting $2.7 billion where its mouth was.

Walmart says its average pay for a full-time nonmanagerial employee is now $13.69 an hour, up 16 percent since early 2014. In the same span, consumer prices have risen 2.1 percent.

To some critics, though, it still amounted to a half-measure, and one framed to maximize public attention. “In our minds this is certainly a step in the right direction, but it’s typical Walmart in that it’s minimal and there’s a lot of spin on top of what’s really happening,” said Daniel Schlademan, a founder of the labor group Our Walmart, which wants the company to have a starting wage of $15 an hour.

In particular, new hires typically do not receive the $10 minimum wage until they finish a training program that is supposed to take six months but frequently stretches longer. And a promised increase in the predictability and flexibility of hourly workers’ schedules is being tested in only 650 smaller “neighborhood market” stores. It has not been rolled out to the full 4,500 Walmarts.

“The economic reality is that they put a great deal of pressure on managers to keep labor costs and hours down,” Mr. Schlademan said.

more

www.nytimes.com/2016/10/16/up...imes&smtyp=cur (external - login to view)
 
Walter
#2
What utter crap but that is what is expected from the NYT.
 
taxslave
#3
Not bad. Wallywirld will now raise wages to what is still below minimum wage and convince the employees they are happy about it.
 
Curious Cdn
+1
#4  Top Rated Post
So, Walmart employees can afford to shop at Walmart, now?

Henry Ford would be proud
 

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