By Basia Hellwig
Investopedia, Feb 26, 2015
Last week, Walmart (WMT), the largest private employer in the United States, announced that half a million of its workers would get a pay bump to at least $9 an hour by April (2015) and at least $10 by next February (2016). That’s good news for Walmart employees, but also is likely to have a ripple effect for many more at other large employers of low-wage workers. One might ask, what took so long? ...
The federal minimum wage has been $7.25, or $15,080 a year, since 2009. Just to have kept up with inflation since 1968, the high-water mark of the minimum wage’s value, it would need to be $10.90. But raising the minimum wage has become a political football, with Republicans generally lining up against and Democrats for. ...
Not all business is opposed. Costco Wholesale (COST), for instance, supports a national minimum wage hike and already pays its hourly wage earners an average of $20.89/hour, not including overtime. The Container Store (TCS), whose CEO just became chairman of the National Retail Federation, also supports it. Last year, Gap (GPS) and Ikea – perhaps seeing the writing on the wall – raised their hourly wages above the mandated minimum. Groups like Small Business Majority, Main Street Alliance and Business for a Fair Minimum Wage support a higher wage, as do many individual owners who point to savings on turnover costs and gaining happier employees – the key to happier customers. Small specialty retailers with “destination” stores – dance supply stores is one example – already often pay more than minimum wage to attract and retain knowledgeable sales staff. (See also The Cost of Hiring A New Employee.)
Over the last 15 years, a growing body of economic research has studied the impact of the minimum wage. Economists no longer see job losses as the inevitable result of raising the minimum wage. And research backs up New York City’s Mayor Bloomberg’s statement in 2012: “Raising the minimum wage will put much-needed cash in the pockets of more than 1.2 million New Yorkers, who will spend those extra dollars in local stores.” ...
The minimum wage in the United States is no longer a living wage. At $7.25, the federal minimum hasn’t kept up with the cost of living since the late 60s, and there’s a growing movement among workers, policy analysts, state and city governments – and even some employers – to raise it. ...
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