Wal-Mart’s Wage Move May Have Opened Pay Increase Floodgates

Wal-Mart’s high-profile move to raise its minimum wage was aimed at least in part at boosting its reputation among certain constituencies. But what ever the motive, the action now looks like it may have been inevitable given other rising market forces at work. It’s also apparent that Wal-Mart's maneuver may have set in motion a trend that could affect just about any company with hourly employees.

Other retailers quickly raised their own wages to get in line with Wal-Mart’s move, including TJX, which owns the Marshall’s and TJMaxx discount chains. Target came under pressure as to whether it would also make the change to boost workers’ wages, although chain executives were resisting such an action because they were confident their labor rates are where they should be.

“When an issue polls 80% against you, and Republican-led legislatures are passing mandated wage increases at the state level, it might be time to rethink how you’re approaching that issue.”

And buzz abounds that other industries also are confronting the issue of improving labor rates. Residential construction, for instance, is at its highest rate since 2005, with significant labor shortages. Eighty percent of construction firms plan to expand their payrolls in 2015, while only 7% expect to reduce headcounts, according to a recent survey by the Associated General Contractors of America. The fact that many experienced construction workers left the labor force during the Great Recession and haven’t returned has exacerbated the strain attributed to a resurgence in home construction.

Some companies are glad to see Wal-Mart’s move. Part of the reason is that it could begin to change the long-tired conversation in the national media about how evil big business is because companies won’t raise the wages of low-income workers. This may be the case especially in fast food, where McDonald’s has been cast as the American worker’s Public Enemy No. 1 because of its low-wage structure.

“When an issue polls 80% against you, and Republican-led legislatures are passing mandated wage increases at the state level, it might be time to rethink how you’re approaching that issue,” said Joe Kefauver on the Nation’s Restaurant News website.

Certainly, Wal-Mart and many other companies will not object to paying higher wages these days mainly because the U.S. economy finally seems to be on the threshold of significant expansion again after a seven-year slump. For consumer-dependent companies like Wal-Mart, the rewards of a potentially more confident and carefree U.S. consumer base far outweigh the fact that the same economic buoyancy is finally starting to force them to boost pay.


MORE LIKE THIS

  • Get the CEO Briefing

    Sign up today to get weekly access to the latest issues affecting CEOs in every industry
  • upcoming events

    Roundtable

    Strategic Planning Workshop

    1:00 - 5:00 pm

    Over 70% of Executives Surveyed Agree: Many Strategic Planning Efforts Lack Systematic Approach Tips for Enhancing Your Strategic Planning Process

    Executives expressed frustration with their current strategic planning process. Issues include:

    1. Lack of systematic approach (70%)
    2. Laundry lists without prioritization (68%)
    3. Decisions based on personalities rather than facts and information (65%)

     

    Steve Rutan and Denise Harrison have put together an afternoon workshop that will provide the tools you need to address these concerns.  They have worked with hundreds of executives to develop a systematic approach that will enable your team to make better decisions during strategic planning.  Steve and Denise will walk you through exercises for prioritizing your lists and steps that will reset and reinvigorate your process.  This will be a hands-on workshop that will enable you to think about your business as you use the tools that are being presented.  If you are ready for a Strategic Planning tune-up, select this workshop in your registration form.  The additional fee of $695 will be added to your total.

    To sign up, select this option in your registration form. Additional fee of $695 will be added to your total.

    New York, NY: ​​​Chief Executive's Corporate Citizenship Awards 2017

    Women in Leadership Seminar and Peer Discussion

    2:00 - 5:00 pm

    Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations. 

    Limited space available.

    To sign up, select this option in your registration form. Additional fee of $495 will be added to your total.

    Golf Outing

    10:30 - 5:00 pm
    General’s Retreat at Hermitage Golf Course
    Sponsored by UBS

    General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.

    The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.

    To sign up, select this option in your registration form. Additional fee of $295 will be added to your total.