About 500,000 Wal-Mart employees will receive raises in the near future as their employer restructures the way it trains hourly workers and the base pay which it offers those individuals at the lower end of the pay scale.
In April this year, according to several news outlets including NPR, Wal-Mart will raise the base salary of its employees to $9 an hour, and one year from now, the superstore notes, it plans to raise that base one dollar more to $10 an hour. As an hourly worker, this could mean both a bit of good news alongside a feeling of “too little too late.” The wage hike will put a little extra cash in the hands of those affected, but for many, it will not even come close to offsetting their respective costs of living — even though approaching raise will be $1.75 above the current minimum wage.
The report circulated by the Associated Press cites research from economists that say the raise will not be enough to help most of the lowest-paid Wal-Mart employees to completely afford housing, transportation, or food for their families. Indeed, the average wage for a Wal-Mart employee, even with this latest hike, will only rise to $13 an hour which is still $2 less than the $15 an hour “living wage” for which some employee advocate groups are pushing. The AP notes further that the raise will not even be able to push many workers above the poverty line.
Wal-Mart’s own announcement comes as part of its Q4 2014 financial report that shows the retailer generated revenue in the quarter equaling an increase of 1.4 percent to $1.9 billion. Doug McMillon, the president and CEO of Wal-Mart, provided a statement in his company’s announcement that sums up the company’s intention to enhance its engagement with employees to include better training, possible promotions, and incentives to take college courses.
“Walmart is also piloting a new, comprehensive on-boarding and training program to create clear career pathways for associates, so they can earn more and seek promotions,” McMillon said. “We’re encouraging our associates to continue their education by providing no-cost access for them to complete their high school diploma or GED, as well as free and low-cost college credit to reduce the time and cost of earning a college degree. The skills and training that an associate receives through this program will be transferable outside of Walmart.”
He said his company will try to provide a “ladder of opportunity” that will grow beyond this increase in base pay, but critics are still apparently leery of the fact that, depending on where employees live, it will still be hard for them to make ends meet. It may take time for critics to come around; it may also take an additional raise to at least $15 an hour to get some complaints off Wal-Mart’s back.
Still, the gripes about Wal-Mart’s base pay, even in the face of overall growth as a company, comes as not its only worry. An article in Time says Wal-Mart sits at the bottom of the American Customer Satisfaction Index for its “poor service; messy or understocked shelves; and higher prices than many consumers expect.” Mostly, a survey of 8,700 consumers associated with the Index showed that respondents were unhappy with the rise in prices for goods. Wal-Mart’s score reached its lowest mark since 2007 and is currently in a multi-year trend of ranking the lowest among all department and discount stores.
Wal-Mart’s hike in wages may not be enough to make those scores rise or make customer opinions much more positive. It will take a strong effort on the part of the retail giant to address all the issues facing it at this time.
Image courtesy of Daniel Christensen via Wikimedia Commons