Wal-Mart Raising Wages as Market Gets Tighter

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This is what happens when you let the market control wages vs tax and spend liberals.

from The Wall Street Journal,

Retailer to increase associates’ hourly pay to $9 in April, and $10 next year.

Wal-Mart Stores Inc. plans to boost pay for its U.S. employees to at least $10 an hour by next year, well above the minimum wage, signaling a tightening labor market and rising competition for lower-paid workers.

The action could signal a turning point for what have been stubbornly stagnant wages since the recession ended almost six years ago, and it would amplify gains for low-wage workers across the nation if other companies follow the nation’s largest private employer. The new rate is 38% higher than the current federal minimum hourly wage of $7.25.

“Wal-Mart’s move to raise their employee pay base is a sign that the labor market has already tightened,” said Joel Naroff, chief economist at Naroff Economic Advisors. “Their action could create a floor under wages and others may need to follow in order to retain and attract workers.”

Employers are adding jobs at the best pace since the late 1990s. As result, the unemployment rate fell to 5.7% last month from 6.6% a year earlier, a sign of diminishing slack in the labor market.

Economists have been waiting for years for wage growth to kick in, and more signs of that are emerging. Companies say they are having to fight harder to attract and keep good employees. Starbucks Corp. raised its starting pay last month, and Aetna Inc. said it would begin paying its lowest-rung workers $16 an hour in April. Gap Inc. last year said it would raise starting pay to $10 an hour. Others such as Costco Wholesale, Hobby Lobby and IKEA Group tout that all their workers earn more than the minimum wage.

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