The fact that Walmart, the world’s largest company, will raise its wages is great news for its 1.3 million employees throughout the U.S., but also for the country as a whole. The workers will enjoy a higher buying power, which will stimulate their family’s economy as well as the nation’s. Hopefully, this action will set an example that other corporate giants will want to follow.
Walmart has been one of companies hit hardest by criticism regarding the low wages it pays its “associates,” who, in reality, are full-time workers without benefits. For a long time, it was said that the retailer’s business model ‒ which made them over $16,000 million last year ‒ could not absorb an increase in its workers’ pay to help them earn more than a minimum wage that forced workers to seek public assistance. But it happened.
It is great ‒ and fair ‒ that Walmart’s administration and shareholders chose to share part of the company’s earnings with their employees by raising their compensation. Nevertheless, it took a lot to get here.
Pressure from labor unions, incessant campaigns, the worsening of economic inequality and the White House’s push to raise minimum wage have driven this salary increase. Still, all of these circumstances are dismissed by critics who say that Walmart’s decision is a result of the free market and that it confirms how unnecessary government intervention is when it comes to worker compensation issues.
The truth is that the situation of the U.S. worker is one of the most fragile in the industrialized world. For instance, this is the only country at this level of development that does not guarantee paid maternity leave. The same goes for sick days. Opinion polls show that people support an increase in minimum wage and maternity and illness benefits.
It is a mistake to think that investing in the human capital is unnecessary and damaging to a company’s efficiency. On the contrary, a well-appreciated labor force increases production as well as spending.
This is the type of profit that will help maintain a vital, stable and competitive economy throughout the 21st century.