Minimum Wage At Walmart To Follow Gap Lead?


Will a $10 minimum wage at Walmart soon become the reality for the retail giant’s many employees?

In a related report by The Inquisitr, the clothing store Gap recently announced a $10 minimum wage increase for its workers starting in 2015.

Back in December, a minimum wage increase came to 13 states and according to polls the public overwhelmingly supported a larger increase of $11.50 an hour at the Federal level. But would the $11.50 minimum wage work as a Federal minimum wage based upon historical economic data? An analysis by economist John Schmitt at the Center for Economic and Policy Research shows that, if the Federal minimum wage is indexed to the official Consumer Price Index (CPI-U), then the Federal minimum wage should be $10.52 an hour. If you instead use the CPI-U-RS methodology for calculating inflation, then the Federal minimum wage should be $9.22. So, yes, unfortunately on a national level the $11.50 minimum wage is a bit too high based upon historical standards while the $10 minimum wage seems a more likely middle ground solution.

Speaking of history, Harley Shaiken, a labor economist at the University of California, claims that Henry Ford gave us an example a hundred years ago for why employers should consider raising their pay rates behind the government’s minimum wage:

“When Henry Ford announced the 5-dollar-day, the response was that it would diminish the auto industry and bankrupt his company. Instead it jump-started purchasing power, reduced turnover and increased the profitability of Ford Motor Co. There’s a lesson we can still learn from that.”

Because of Walmart’s high volume of sales it’s claimed the retailer is more capable of paying higher compared to its competitors. It’s estimated if Walmart’s minimum wage was increased to $10.10 it would cost the retailer about $200 million per year, which is about an one percent increase in its labor cost. Workers would be given an extra $22.80 per work day assuming they’re currently making $7.25 hourly. As a comparison, when Ford doubled his workers’ minimum wage they were given an extra $62.22 per day when adjusted for inflation.

But will Walmart’s minimum wage actually be increased beyond the state and federal mandates? Back in 2005, Walmart’s CEO heavily advocated the increase, saying, “The U.S. minimum wage of $5.15 an hour has not been raised in nearly a decade and we believe it is out of date with the times. Our customers simply don’t have the money to buy basic necessities between pay checks.” This time around Walmart spokespeople have been a little more vague, only saying “that’s something we’re looking at. Whenever there’s debates, it’s not like we look once and make a decision. We look a few times from other angles.”

What do you think would be a fair minimum wage for not just Walmart but American workers as a whole?

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