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Walmart Announces A Pay Raise In 2016, But Will Employees Even Reap The Benefits?

By Shelley Hazen
Published on: 02:03 PST, Jan 22, 2016

For millions of people who work at Walmart, the news that 2016 will usher in a pay raise sounds like great news. But that doesn’t mean employees will be treated better.

A union campaigning for employees to earn a “living wage” of $15 has criticized the move as meaningless and doesn’t think employees will see much benefit in 2016.

According to Reuters and CNN Money, employees can expect the following in 2016: for anyone hired after January 1, the minimum per hour will be bumped to $10, which comes after an increase to $9 in April.

The full-time average hourly wage will increase to $13.38 (it was $12.96), and the average for part-timers will be $10.58 (up from $10). Entry-level hires will be eligible for a raise after a training program. The hike will take effect in February.

This is all part of the company’s two-step, $2.7 billion investment in wages, benefits, and training; the 2016 boost is part of the second phase. In April, the $9 bump affected 500,000 Walmart employees, and 150,000 people were boosted to full-time.

The store will also allow its workers to carry over their paid time off; full-timers will be able to carry over 80 hours.

But not everyone is greeting this news with calls of celebration. Firstly, it’s important to recall this fact: after last year’s raises, hours were cut. According to the Atlantic, a report circulated that execs were told to rein in labor costs by trimming staff work schedules.

And the chain recently announced that its closing 269 stores, including 154 in the U.S., which means 16,000 people are now out of a job. The company insists those workers will be relocated.

Jessica Levin, a spokeswoman for a the union-backed group Making Change at Walmart, was pretty blunt in her response to the news of a raise in 2016: it’s nonsense.

“After Walmart’s last wage increase stunt, many workers almost immediately saw their hours cut and take-home pay go down. It’s easier to find a unicorn than a worker who has received a meaningful raise, or hasn’t had their hours cut. America’s hard-working families expect better from a company that makes billions in profit a year.”

However, the hike in salary may not be an attempt by the company to look good in the press, the Atlantic pointed out. The labor costs associated with the boost will cost so much that the chain’s investors are shaking in their boots. Walmart is an example of an enduring struggle experienced by all retailers: compensate people well or keep shareholders smiling. The retailer has also recognized that it needs to keep its workers and that better pay translates into more sales.

Of course, a raise may just mean that other aspects of the work environment suffer, Forbes noted: fewer benefits, poorer working conditions, and fewer hours. So, in the end, the 2016 raise may not really make a difference.

Forbes also responded to Levin’s contention that Walmart isn’t doing enough and should pay its workers the “living wage” of $15. And the problem is with the term.

The simple fact is that Walmart, McDonald’s, and the like will never pay enough because people will always be changing their ideas of what good pay is. A living wage is whatever society says is enough so that you don’t appear poor to your middle-income neighbors, it doesn’t reflect actual poverty. In other words, this term only refers to the amount of money required to be able to do or have things that keep you from looking poor.

Real poverty is recognized by the World Bank as $1.90 a day, about enough to feed yourself enough so that you can stay alive.

[Image via vvoe/Shutterstock]

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