Market analysts say the decision from Wal-Mart to increase 500,000 employees' wages in April is going to have a ripple effect on many industries and states. Wal-Mart has agreed to increase the pay to $ 9 an hour, which is nearly $ 2 above the federal pay, and it's already making an impact.
Retailers, based on the information from market experts, are having a difficult time keeping entry-level staff. . Doug McMillon, Wal-Mart CEO, said the pay increase was to give people a sense of ownership when it comes to their store. He said it's the company's belief that customers will benefit from the better store experience, leading to higher sales and returns down the road.
Since last year, Wal-Mart has had difficulty hiring and keeping staff after the GAP increased its minimum wages to $ 9 an hour. In 2015, GAP promised its wages would increase to $ 10 an hour. Wal-Mart has the highest staff turnover rate in the U.S.
The pay increase decision by Wal-Mart has been a major talking point among various retail giants such as TJ Maxx, that's also pledged to increase the minimum wage for their employees – $ 9 an hour in June and $ 10 an hour in 2016.
Carol Meyrowitz, CEO for TJ Maxx, said the pay initiative is an integral aspect of the company's strategies to bring in and keep talent to ensure its customers have a better shopping experience
Dollar General said it has no plans of following Wal-Mart's initiative. Its CEO Bob Sasser said the company looks at the trends going on in the industry and will still compliant with state and federal laws. At this time, there are no plans being made to increase its minimum wage rates.
The decision from the Bentonville-based retailer has also had an effect on several states. For instance, New York state Governor Andrew Cuomo said waiting staff and other staff whose earnings are complemented by tips will see pay raise. He said, by the end of 2015, he'd like the minimum wage to be $ 7.50. Chicago is increasing its minimum wage to $ 10 an hour. By Federal Law, employers must pay at least $ 7.25 an hour, and it's been that way since 2009. President Barack Obama would like it if Congress would increase the minimum wage to $ 10.10 an hour.
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