With pay raise, Wal-Mart misses minimum wage movement’s $15 mark
Wal-Mart announced on Thursday that it will raise the wages of 500,000 of its 1.3 million workers in the United States by instituting a $9 an hour starting rate in April that will increase to $10 in February 2016
The announcement is no doubt good news for the workers who will pocket more money each week, but in an era when $15 per hour has become the rallying cry of a growing minimum wage phenomenon, the move can easily come across as too little, too late.
Wal-Mart, along with McDonald’s, has been targeted by a growing movement that’s advocating for higher worker pay—an issue that has resonated with Americans, as they witnessed an economic recovery that has produced a disproportionate number of low wage jobs. Worker groups first took serious aim at the retail giant in 2012, organizing a strike on Black Friday to draw attention to their part-time employment and poor compensation policies. The low-wage worker movement has grown since then, spawning a rash of protests against fast-food employers and local campaigns for higher wages at the state and city levels, many of which have called for such workers to earn a minimum of $15 per hour.
Wal-Mart’s announcement on Thursday that it will set its entry level pay at $6 less than that has struck some as a feeble attempt to quiet—if not satisfy—the minimum wage movement; like a comeback to a stinging joke when the conversation’s already moved on.
“This is a symbolic victory for Wal-Mart,” says Tom Juravich, professor of sociology at University of Massachusetts Amherst. “They have no intention to meet the Fight for $15’s demands. This is a classic technique that we see in collective bargaining and organizing campaigns. Management will give a small or symbolic raise to take the energy out of the campaign. That’s what they’re intending to do here.”
Tsedeye Gebreselassie, a senior staff attorney at the left-leaning National Employment Law Project, called Walmart’s $9 minimum wage antiquated. “If they’d made this announcement a few years ago, it would’ve been a significant step for low-wage workers.” But with states and cities setting double-digit minimum wages, $9 “is a bit behind the curve.”
Wal-Mart says that it had been looking at raising its associates’ wages for a while and made its announcement on Thursday after talking to their employees to figure out “what it is that they’re looking for overall in a job. Starting wage is part of that,” Kory Lundberg, a Wal-Mart spokesman, told Fortune. Lundberg also noted that Wal-Mart listens to its “critics.” He said $9 an hour “is a good number for us; it made sense for our associates.” Lundberg also said that increasing the starting wage any more than that would have set “the first rung of the economic ladder too high,” making the jobs “unattainable” for workers seeking entry level experience. Once the company institutes its $9 minimum wage in April, part-time Wal-Mart workers nationwide will earn $10 per hour on average; full-timers will make $13.
Wal-Mart plans to adjust the $9 starting wage to account for regional cost of living. Chris Tilly, director of UCLA’s Institute for Research on Labor and Employment, pointed out that the areas where the $15 minimum wage has gained the most traction are big, expensive markets. The heart of Wal-Mart’s business, meanwhile, is in the rural United States. (In fact, the retail has often had trouble breaking into large metropolitan areas.) “[Wal-Mart’s] not trying to impress urban sophisticates. Its customers are shopping at Wal-Mart to get a lot at a low price. [Wal-Mart] wants to speak to that constituency in the heartland.” Perhaps, then, $9 per hour does the trick.
But by lowballing the minimum wage movement’s $15 demand, Wal-Mart may have missed an opportunity to make a major, sweeping change in the lives of low-wage workers throughout the nation. “Wal-Mart not only can do better; it has an obligation to,” Gebreselassie, says. “As one of the largest employer, what it does really sets the standard for the [retail] sector.”