Wal-Mart Stores Inc., the nation's largest private sector employer, announced Thursday that it will give half a million employees a raise. Starting this spring, the retailer's lowest-paid workers will earn $9 an hour, significantly higher than the $7.25 federal minimum wage, and their pay will go up to $10 an hour starting next year. The company also said it would make workers' hours more predictable by giving them their schedules at least 21/2 half weeks in advance.
Wal-Mart is the latest in a recent spate of major U.S. employers that have announced plans to raise pay well above the federal minimum in order to attract better workers and reduce turnover. Last year, Gap Inc. and Ikea said they would pay at least $10 an hour, and last month, health insurer Aetna Inc. said it would pay a minimum of $16.
But when a company like Wal-Mart — which has 1.3 million workers across the United States and has made low pay part of its business model — says it's OK with higher wages, that should be a sign to Congress that it's politically safe to raise the federal minimum wage.
Last year President Obama proposed raising the minimum wage from $7.25 to $10.10 in 2016. That would restore much of the buying power that minimum-wage workers have lost to inflation over the last five decades, despite the occasional adjustment by Congress. The wage hasn't increased since 2009. Indeed, there is a growing recognition across the political spectrum, including among some business owners, that the current minimum wage is too low and that higher pay may speed up economic growth. Yet the president's proposal has gone nowhere on Capitol Hill.
Wal-Mart has its own reasons for boosting pay. It has long been criticized for paying near-poverty wages and for employing half of its workers on a part-time basis. And the company has acknowledged that low employee morale has hurt customer service and sales.
Still, when the biggest private sector employer says that higher wages are not only possible but good business, that sends an important message to lawmakers: It's time to raise the federal minimum wage.