Walmart (WMT) workers are getting a raise! This morning, America's largest employer said that it will raise the minimum hourly rate it pays employees to $9 an hour by this April. By next February, Walmart will give workers another boost when they bump their lowest hourly wage to $10.
It's not just the hourly workers who benefit. Walmart is also raising manager's pay to $13 an hour this summer and $15 early next year. The company says the moves will impact 500,000 employees and cost the company $1 billion this year.
Coincidentally Walmart's move comes a year to the day after Gap (GPS) hiked its wages across the board. It's easy for the cynics to dismiss Walmart's move as a PR stunt but even for a company doing over $900 million a day in revenue in the United States, proactively raising wages for half a million workers is a big deal.
Walmart employs more than 1.4 million Americans and 2 million people around the world. You've probably heard me say before that Walmart isn't just part of America. Walmart IS America. By extension, is Walmart's minimum wage now the minimum wage for our nation? Maybe so...
If you look at the spread between Walmart's wages at $9 or $10 an hour and the absurd $7.25 federal minimum wage. The spread between the government's view and wage earning reality is already large and it's going to become even more glaring next year.
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Walmart employs more than 1% of the entire U.S. workforce and has stores across the country. By this time next year anyone applying for work at any company knows they have the option of working at Walmart for $10 an hour.
We mentioned Gap and we've covered Walmart but what about the competition?
Here are some other merchants and their lowest starting wage, based on data we dug up at Glassdoor.com.
These numbers are a little murkier than I'd like, no company wants to brag about the absolute lowest rate it pays employees. The important thing here is that it's hard to find any companies actually paying anywhere near that $7.25 Federal Minimum Wage. Like some case study of capitalism gone right, the free market has given Americans raises even as D.C. filibusters and points fingers.
In fact, the National Retail Federation says Walmart's move is evidence that the government is posturing on wages while retailers raise the bar to attract better employees. In April, Walmart will be paying 25% above minimum wage and that will probably be the baseline going forward. As the NRF points out, more than 42 million people in America are working retail, that's 1 in 4 jobs.