Wal-Mart recently made headlines by instituting a wave of minimum wage increases in several states. In 2014 alone, retail workers in 13 states saw a bump in base wages. As the nation’s largest private employer, Wal-Mart’s wage increases will impact more than 1,400 stores and likely lead to cascading effects through local economies.
On one hand, Wal-Mart’s moves are clearly in the right direction. On the other hand, critics suggest that the company has not done enough to increase wages. When private employers pay workers less than a living wage, workers often must turn to government assistance. Taxpayers then pick up this bill, essentially subsidizing low-paying private employers.
Wal-Mart says it hopes to simplify its payment systems. It plans to change its pay structure by lumping cashiers, cart pushers, and maintenance workers into one payment class. However, the retailer will also narrow the gap between low-paying and high-paying positions. One Wal-Mart manager explained the company’s reasoning: “Essentially… wage compression at the upper level of the hourly associate is going to help absorb that cost of the wage increase at the lower level.”