The nation’s largest employer announced last week they are increasing their starting pay to $9. Wal-mart also announced that will increase to $10 in 2016. Creighton University Economist Ernie Goss says Wal-Mart is a $272-billion dollar corporation and this move will not have a big impact on their bottom line. However, Goss says this is not good news for their competitors.
Goss says, “They are going to raise productivity or they are going to have to reduce profits or increase prices. I think they are going to increase productivity. I think it is going to push Target and Costco, two major competitors, to raise their minimum.”
Goss says this is good for consumers, the economy and for taxpayers. He says this wage increase will reduce the number of people receiving the earned income credit on their income taxes and reduce the number of people receiving government benefits like the Supplemental Nutrition Assistance Program – or food stamps.
Goss says Wal-Mart’s motivation to increase their starting wage is to cut the turnover rate, increase productivity by attracting higher quality employees and to stem the push for unionization.