Wages at the Mid and Lower Levels Making Slight Gains–Part 3

The article ends with a review of how the lowest paid workers are faring–MacDonalds,  Starbucks and Walmarts. Better, apparently, thanks to minimum wage lifts in New York and California. 


In April, Gov. Jerry Brown signed legislation that will raise the minimum wage in California to $15 an hour by 2022. On the same day, New York enacted legislation that will raise the minimum wage there to $15. The increases vary by region — faster for New York City, slower for more rural areas — and it is unclear when the entire state will hit that level.

As the states with the nation’s largest and third-largest populations moved to increase their minimum wages, large companies realized that they’d soon have to raise the pay of many of their workers. That was one factor behind the nationwide pay raises that several began announcing last year.


“We certainly are mindful of wage increases in various states throughout the country,” McDonald’s chief financial officer Kevin M. Ozan told investors during an earnings call in July

“It has, from a purely business standpoint, created an incentive to lift the wages at the bottom across their workforces,” said Christine Owens, executive director of the National Employment Law Project, which has been pushing for a $15-an-hour minimum wage.

“A lot of companies … were getting a lot of bad press about how they treated their employees, and raising wages was an obvious way to respond to that,” she said.


Early last year, Wal-Mart became the first major employer to announce raises for its lowest-paid workers. It now pays them at least $10 an hour once they finish the company’s training program. Wal-Mart is spending $2.7 billion over two years to increase pay, bringing the average full-time hourly rate for its workers to $13.38.

Brett Biggs, the company’s chief financial officer, predicted the investment “will pay off long-term.”

“Whether it’s lower attrition rates in the stores, better motivated associates, we think we’ll see the benefits from that,” he told an investor conference in June.


Starbucks Chief Executive Howard Schultz cited similar reasons after announcing this summer that the company would raise base pay for its workers by at least 5% in October. The company’s baristas earn an average of about $9.40 an hour, according to Glassdoor.

“What we want to try and do is really get ahead of any federal or state mandate to be the employer of choice,” Schultz told analysts on an earnings call in July.

After saying last year that he opposed an increase in the federal minimum wage, Trump this summer said he thought it should be raised to at least $10. The Democratic Party’s official platform calls for increasing the federal minimum wage to $15.

“Raising the federal minimum wage won’t just put more money in the pockets of low-income families, it also means they will spend more at the businesses in their neighborhoods,” Democratic nominee Hillary Clinton told a Michigan crowd last month. “We need to get incomes and wages rising, and it will help the whole economy grow and be fairer.”


End of article




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