A fair wage for a day’s work has not often applied to the retail workplace. Walmart has long been the bogeyman of the dead-end retail job. But in recent years it has tried to wear a kinder, more progressive face. A few years ago it announced that it would lift its minimum wage to $11 even as the federal mandate stood at just $7.25 per hour. On Thursday it raised its own bar, boosting the average minimum for 425,000 “associates” to at least $15 per hour. The rise happens to coincide with Washington’s efforts to raise the federal minimum wage to that level. The group’s largesse came just as it announced a blowout fiscal 2020.
Free cash flow exploded by 70 per cent to $26bn, as the retailer paid out $9bn to shareholders in dividends and buybacks. It has plenty of capacity to raise wages — a three dollar per hour boost, for example, would cost about $2bn — while keeping shareholders’ pockets full. But activists and liberal politicians will not be so easily satisfied.
Employers and business interest groups once howled about mandated wage increases acting as job killers. But then, in a tight labour market, basic economics dictated that employee remuneration should increase. Economic studies have generally shown that employment levels hardly declined when state and local minimum wages rose. A recent study from the Congressional Budget Office concluded that any job losses would be mostly offset by the number of people lifted from poverty.