Tuesday, August 08, 2006

Wal-Mart extols pay changes

The current Wally-World chatter is that Wal-Mart is raising their starting pay in about a third of their markets by 6%. Oooh, sounds pretty generous of Mr. Smiley, doesn't it. Let's see what Mr. Calculator says...

Say in a given market, Wal-Mart starts its associates at $6.50 (which is a pretty generous assumption). An average starting associate may get around 25 hours a week (your mileage may vary). That works out to $8450 a year. Add on 6%, and you get $8957 a year, a jump of $507 a year or $42 a month. Before taxes. And I thought my measley raise was small. And I'm sure that kind of money seems like a lot more to a family where one of (or the only) provider is bringing home less than $9k.

In the same news, Wal-Mart is also touting their new wage caps. That's right, wage caps are good. It gives associates motivation to move up. We know how I feel about being pushed to move up.

Now to be fair, wage caps aren't a new concept, and I'm surprised Wal-Mart didn't already have them, as a lot of retailers do (see aforememntioned "measley raise" comment). I'm not taking exception to Wal-Mart applying caps, I just think that it's stupid of them to try to spin this like it's a good thing, especially for their employees.

It's a business thing. After Cost of Goods, Labor is the largest expense for a retailer, and with Wal-Mart running on razor thin margins (so that they can use low pricing to squeeze the life out off Downtown USA and Mom & Pop), they can't afford not to strictly control their labor expenses. Which is why we see articles about Wal-Mart employees having their family on government assistance. Yeah, Mr. Smiley is really doing us all a favor.

See the article here.


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