Yahoo – AFP,
John Biers, 19 Feb 2015
New York
(AFP) - Global retail giant Walmart, which has faced criticism over low
salaries and skimpy benefits for years, announced Thursday it would raise wages
for 500,000 workers in the US.
The largest
private single employer in the United States said salaries for about 40 percent
of its US staff would be lifted to at least $9 per hour in April, $1.75 above
the federal minimum wage. By February 1, 2016, US staff will be paid at least
$10 an hour.
The move
follows mounting criticism by labor unions and other groups that the company's
low wages have locked workers into poverty and pressured some of them to seek
public assistance to make ends meet.
President
Barack Obama has also made the issue of low pay and a growing income gap across
the country a key focus of his economic policy.
In a video
address to employees,
Wal-Mart Stores chief executive
Doug McMillon
acknowledged
that "sometimes we don't get it
all right" (AFP Photo/Alex Wong)
|
"Good
to see Walmart raising wages for about 500,000 employees. Now it's time for
Congress to #RaiseTheWage," the White House tweeted.
In a video
address to employees, Wal-Mart Stores chief executive Doug McMillon
acknowledged that "sometimes we don't get it all right."
"As a
team, we really wanted to demonstrate this year that we really care about you
as associates and appreciate the work you do every day," said McMillon.
Last year a
coalition of progressive and pro-labor groups, Americans for Tax Fairness,
issued a report claiming that the government provides $6.2 billion a year in
poverty-based assistance to Walmart workers because of their low wages.
The group
also attacked the tax benefits earned by the family which controls Walmart, the
Waltons, called the world's wealthiest family by Forbes with a $152 billion
fortune.
States
enacting wage hikes
The move
came as a number of states have increased their minimum wages in recent years
to address what economists say is a growing gap between what the average and
wealthiest American households earn.
As of
January, 29 states plus the District of Columbia have minimum wages above the
federal standard, according to the National Conference of State Legislature.
Emily
Wells, a member of OUR Walmart, an labor union-backed employee group that seeks
higher wages, said she was "proud" their campaign had yielded a
raise, but that more is needed.
"Especially
without a guarantee of getting regular hours, this announcement still falls
short of what American workers need to support our families," said Wells,
who works in Florida.
"With
$16 billion in profits and $150 billion in wealth for the owners, Walmart can
afford to provide the good jobs that Americans need -– and that means $15 an
hour, full-time, consistent hours and respect for our hard work."
But the
National Retail Federation, a leading trade group, said Walmart's decision
reflected the power of the marketplace as it took a swipe at policies such as
government mandates to hike wages.
"Like
many other retailers, Walmart made its decision based upon what is best for
their employees, their customers, their shareholders and the communities in which
they operate," it said..
"Government
mandates that arbitrarily require businesses to implement politically driven
policy are unnecessary and, in fact, create hurdles to job creation, curtail
capital investment and pose as barriers to a sustained economic recovery."
McMillon
told the network CNBC that Walmart would stay out of the political debate on
the minimum wage.
Walmart
said increased spending on wages and on a new program to promote employee
education would weigh on future profits. The new program will shave 20 cents
per share from earnings in fiscal 2016.
Walmart
projected fiscal 2015 earnings of $4.70-$5.05 a share compared with the $5.19
expected by analysts.
Morgan
Stanley said the company's outlook was disappointing, but that the wage announcement
was positive "for how it should enhance morale, attract and retain labor,
and lead to better customer engagement."
The wage
hike could also prompt competitors to follow suit, which could give
lower-income Americans more spending power, eventually feeding back into
Walmart results, Morgan Stanley added.
In
afternoon Thursday Walmart shares fell 2.9 percent to $83.77.
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