Walmart's Wage Hikes Have Unexpected Consequences
By Christine Kern, contributing writer
Retailer faces employee backlash against new wage hikes.
When Walmart CEO Doug McMillon announced plans to raise wages for some 500,000 employees in February, he said “Today, we announced comprehensive changes to our hiring, training, compensation, and scheduling programs, as well as to our store management structure. These changes will give our U.S. associates the opportunity to earn higher pay and advance in their careers.” Now, those changes have produced an unexpected backlash from employees who are not seeing changes to their wages.
According to Bloomberg, the new policy is working contrary to the initiative’s intent of improving morale and raising employee retention rates. In particular, some of the hundreds of thousands of Walmart employees whose wages are not being affected by the new policy are getting angry.
Bloomberg reported that Walmart employees are speaking out about the new policy via Facebook comments and interviews, saying that the move is unfair to senior employees who now make either the same or similar wages to newer, less experienced colleagues.
The problem is that new workers will see minimum hourly wages of $9 as of April, and at least $10 starting in February, but many senior employees make just $12 an hour.
“It is pitting people against each other,” said Charmaine Givens-Thomas, a 10-year Wal-Mart veteran. “It hurts morale when people feel like they aren’t being appreciated. I hear people every day talking about looking for other jobs and wanting to remove themselves from Wal-Mart and a job that will make them feel like that.” Givens-Thomas, who works at a Walmart in the Chicago area, also belongs to OUR Walmart, a union-backed group that lobbies for better working conditions.
Workers argue that raising minimum wages for new employees is not enough; they must also preserve the corporate ladder of wages that allows employees to work themselves up into management.
Kristin Oliver, Walmart’s U.S. human resources chief told Bloomberg that the company realized that the minimum wage hike could lead to disenfranchisement among some employees, and reported that executives have been listening to disgruntled employees. She also acknowledged that the new policy, while designed to help improvement retention rates, could actually lead to increased turnover.
Walmart spokesman Kory Lundberg told Bloomberg that the retailer is trying to respond to unhappy employees via a revised scheduling system that helps workers get preferred schedules and a new training program to help employees advance within the company. Both initiatives were announced in February as a means to address the different needs of its workers.
“We are constantly looking and evolving what the right pay should be and we were aware of the issue,” Oliver told Bloomberg. “We weren’t prepared to go forward with any additional increases, but have continued to look at it to see if there is something else we should do for those in the middle.”
A number of other retailers have already made the investment in their workforces, including TJMaxx, the Gap, IKEA, and Target, by raising minimum wages. And Dollar General entered the discussion by adding hours, rather than hiking hourly wages, for its employees.
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