Higher Pay | Wal-Mart’s Response To Press Nightmares

Wal Mart's Bad PressRecently, Wal-Mart has been ducking and dodging bad press revolving around the way they treat their employees. The bottom line is that the company has been dealing with a slew of bad press nightmares. From Forbes to Gawker, everyone seems to be bashing Wal-Mart for the poor treatment of its workers; and to be honest, the slew of bad press isn’t unwarranted. Today, we’ll talk about the poor wages Wal-Mart employees currently receive. We’ll also discuss the company’s plans for pay raises, and how investors seem to feel about the change in policy.

Wal-Mart Employees Are Severely Under-Paid

While there are several complaints that have been raised against the company, one of the most recurring issues seems to be pay for employees. When I looked into the numbers, I could see why. Here’s what the data shows…

  • Wal-Mart currently employs 1.3 million people in the United States.
  • On average those 1.3 million workers are paid between $9.48 and $12.85 per hour.
  • 500,000 of these employees will be receiving raises in pay. Approximately 6,000 of them are currently working for the federal minimum wage of $7.25 per hour.

Given the cost of living in the United States, the vast majority of Wal-Mart employees must either depend on spousal income or second and in some cases third jobs in order to survive financially.

Wal-Mart’s Plan To Increase Pay

The company is in the process of making some pretty severe changes in response to the nightmare press releases we’ve been seeing about them. While I would expect more policy changes to come, on Thursday, the Wal-Mart announced it’s first step in an effort to show employee appreciation. The company will be providing raises to approximately 500,000 workers starting in April. Here are the key points of the pay raises…

  • The raises will be going to workers for both Wal-Mart and Sam’s Club.
  • The company will be increasing its minimum wage to $9 per hour; $1.75 per hour more than the current federal minimum wage.
  • Average pay will climb from between $9.48 per hour for part time workers and $12.85 per hour for full time workers to $10 and $13 per hour respectively.
  • The raises will cost Wal-Mart approximately $1 billion.

The company also announced that by February of next year, it plans to ensure that no United States Wal-Mart employee earns less than $10 per hour.

Another big issue causing Wal-Mart quite a few press headaches was their scheduling policies. Unfortunately, employees had little to no control over when they were asked to work and how many hours they would be required to perform. While the company hasn’t given too many details about the policy change, they have announced that they will be giving employees more control over scheduling; giving many the opportunity to spend more time with family and reduce day care costs.

How Investors Are Reacting To The News

While the bad press seems to have sent the Wal-Mart’s stock on a downtrend throughout the past month and a half; the company’s stock price seems to be bouncing back. On Friday, the stock gained 0.93% and held a steady upward trend throughout the day; suggesting that investors are happy to see the changes. After all, happy employees equates to happy customers!

What Are Your Thoughts?

Do you think Wal-Mart will be able to change its image as one of the worst companies in the United States to work for? Let me know in the comments below!

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1 thought on “Higher Pay | Wal-Mart’s Response To Press Nightmares”

  1. Good to see they finally realized that they needed to actually pay their employees enough to eat and live like humans … still needs to be a bit higher given how little they work (often less than 30 hours per week)

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