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Employees take on the Wal-Mart wage increase

David Gura Feb 19, 2015
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Employees take on the Wal-Mart wage increase

David Gura Feb 19, 2015
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If you work at Wal-Mart, today’s news may be encouraging. About half a million employees will get an hourly raise to $9 dollars an hour, and next year, it will go up to $10 an hour. A lot of people are doing the math, wondering what kind of difference that could make.

At a Wal-Mart Supercenter in Dayton, Ohio, a part-time associate in the apparel section makes $8.10 an hour, the minimum wage in Ohio.

“Right now, it’s just pretty much paycheck-to-paycheck,” says Kelly Sallee, who has worked for the company for about eight months. That is barely enough to cover her bills. Sallee is part of a group called OUR Wal-mart, which has been pushing Wal-Mart to raise its wages, and she expects her hourly wage will go up by 90 cents.

Sallee, who is 22 years old, is engaged and eager to start a family, and Sallee says she and her fiancé already know what they would do with more money. “We would save up for a car,” she says. “We would be able to pay car insurance.” Sallee could stop taking the bus to work.

According to Arin Dube, an economist at the University of Massachusetts, Amherst, Wal-Mart’s decision could make a difference – especially to employees who are making the federal minimum wage, $7.25 an hour. “We are talking about a thousand or two thousand dollars, maybe, for some of the more effected workers,” he says.

Dube says there is evidence that when minimum-wage workers see their wages rise, they start saving.

Amy Glasmeier is a professor at the Massachusetts Institute of Technology who has spent a lot of time studying poverty issues and what constitutes a living wage, and she says even a modest increase matters.

“A family member getting sick, a car needing a repair, a dollar is going to add up,” she explains. “A 10 percent increase is a 10 percent increase.”

But for many Wal-Mart workers who live around the federal poverty line – about $12,000 for a single person – that increase is likely to provide only some solace. 

“It’s moving from the bottom to, you know, a shade above the bottom,” says David Neumark, who directs the Center for Economics and Public Policy at the University of California, Irvine.

Now, Wal-Mart says this pay bump is significant, and it is going to cost the company around $1 billion a year.

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