New Stories

Is It Enough? Wal-Mart: A Little More than Minimum Effort

Wad-Mart has increased its minimum pay to employees to $10 per hour. This is a big step forward, but is it enough?

We can all agree that the current minimum wage of $7.25 per hour isn’t enough for a family to live on (assuming the breadwinners work only 40 hours per week), but is $10?

Roughly, someone making $10 per hour, working 40 hours per week, is going to gross $20,800 per year. Even without taxes, for a single mother, that isn’t going to cut it.

According to wikiinvest.com, Wal-Mart’s profits for 2014 were $129.74 billion. Think progress.org says that about 500,000 employees will see a wage increase. For the sake of argument, let’s treat these employees as if they were all Pennsylvania workers, working at state minimum wage. Their pay would increase by $2.75 per hour. Again, for the sake of argument, let’s say that these employees are all working 40-hour-work weeks. Wad-Mart is spending an extra $2.86 billion on employees. While this seems like a lot, keep in mind this is only about 2.2 percent of Wal-Mart’s profits.

In a country where Wal-Mart is so ubiquitous that it could set the precedent for minimum wage, why not pay employees $12 per hour? This would cost a total of $5.72 billion, or 4.4 percent of their total profits. More importantly, it would allow a 40-hour-per-week worker to gross about $24,960 per year, or an extra (roughly) 16 percent of their total income.

Wad-Mart could even choose to raise its prices in order to compensate for the money that it’s losing. That way, it could still keep its profits high and employees happy. How much would it cost the average customer to pay for the Wal-Mart-employees’ wages at this rate? According to makingchangeatwalmart.org, the cost would be an extra $.46 per shopping trip, or $12.50 per year.

More importantly, this rain increase would do one of two things: give Wal-Mart an unprecedented hiring advantage over competitors who do not want to pay as much or force others to pay a higher wage, as well.

But while Wal-Mart can afford to do this, what does this mean for the average small-business owner that can’t afford to keep up with rising minimum wage? Maybe it’s a good things Wal-Mart wants to keep its employees poor.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: