Since Walmart began a push to raise wages for its legion of store employees last year, leaders at the big box chain have attributed its solid performance to the greater investment they were making in their staff. And because Walmart is such an enormous actor in the US economy, its choices have ripple effects in the retail sector. Over at Quartz, Oliver Staley argues that while some see the company’s size as being a “malign force,” that doesn’t take into account how Walmart’s choices can be also be beneficial:
The company also has used its massive buying power to eliminate waste in packaged goods and to drive down the cost of energy-efficient light bulbs, speeding their widespread adoption. Raising wages can have an even bigger impact. Walmart employs one in 10 US retail workers, and one out of every 100 US private-sector employees. Just as the company forced competitors to hold the line on wages, increasing its pay is now pressuring rivals to match it.
Walmart also raised salaries for entry-level managers in response to the Obama administration’s now-defunct overtime rule last year, but at the bottom of the pay scale, seemingly small increases, say from $10 to $11 an hour, can make a big difference in the lives of the working poor. Walmart is such a huge employer, Staley points out, that its pay practices effectively set a benchmark for the rest of the retail industry, pressuring other retail giants like Target to commit to adopting a $15 minimum wage by 2020:
We can already see the effect of Walmart’s raise in national pay rates for cashiers, who are some of the lowest-paid workers in retail. According to US government statistics, hourly wages for cashiers ticked up noticeably nationwide in 2016. And while hikes in the minimum wage in a few states may have played a part, hourly pay for cashiers also climbed in states like Oklahoma, which didn’t raise its minimum wage, and is representative of the regions where Walmart has an outsized impact. …
“Once you start down this road, if you’re big enough, you’ll bring others with you,” says Thomas Kochan, a professor of work and employment relations at MIT’s Sloan School of Management. In large swaths of the country where Walmart dominates, the company’s pay increase for low-earning workers is effectively raising the minimum wage.
This is a good example of something we’ve seen more and more of over the past year: companies using the market to create de facto social policies while political institutions are too gridlocked to create them by law. In this case, the debate over raising the minimum wage remains as bitter as ever and states are moving in different directions, but a bidding war between Walmart and other retailers that pulls the industry’s minimum wage up to $12 or even $15 an hour currently looks like a more likely path toward that outcome than a national minimum wage law.