Walmart is the biggest private employer in America, with 1.3 million United States workers. And many of them will soon see a raise, in the latest snippet of corporate news that suggests a firmer job market is starting to enable workers to successfully demand higher pay.
The company said it would pay even its lowest-level workers at least $9 an hour starting this spring, comfortably above the $7.25 federal minimum wage, and push that to $10 in 2016.
Walmart is surely hoping to get plenty of good press for its decision to offer raises, but it’s worth examining the decision less based on whether they deserve applause on some moral grounds and more based on the economic forces that led them to act. Indeed, the best possible news would be if Walmart’s executives made this decision not out of a desire for good press or for a squishy sense of do-gooderism, but because coldhearted business strategy compelled it.
Every firm, no matter how big, must succumb to market pressures. This is a perfect example how how free markets work to raise wages, not lower them as opponents like to baselessly claim.
Finding qualified workers is harder for employers now than it was then, and their workers are at risk of jumping ship if they don’t receive pay increases or other improvements. Apart from pay, Walmart executives said in their conference call with reporters that they were revising their employee scheduling policies so that workers could have more predictability in their work schedules and more easily get time off when they needed it, such as for a doctor’s appointment.
Market forces, not government, compelled this change. This is something to keep in mind the next time someone talks about capitalism being “a race to the bottom” or that government wage mandates are necessary.