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

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.

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.