We Just Got Another Big Clue About why Walmart is Raising Wages

[Purveyor]

As the economy improves, it's getting harder and harder to retain workers.

by Dashiell Bennett
8:18 AM EST March 5, 2015

Last month, Walmart made headlines by announcing it would be hiking wages for a significant chunk of its hourly workforce, boosting its minimum hourly rate to $10 by next year. The move earned them a lot of praise (and forced some rivals to follow suit), but it also led to some speculation about what really drove the decision. Being aggressive about keeping costs low has been a key to the company's growth, but it's also made the company a target for critics who say they take advantage of workers.

Yesterday's Beige Book (an anecdotal roundup of economic trends across the various Federal Reserve districts) gave us a clue about what's really going on. The report notes that contacts in several regions of the country noted that employers are starting to have trouble attracting and keeping workers, and have been forced to raise their wages as a result. The bolded line is ours:

Wage pressures were moderate across most Districts, but some contacts reported increased wages to attract skilled workers for difficult-to-fill positions. In particular, service sector firms in the New York District noted increasingly widespread reports of wage hikes. Contacts in the Cleveland, Richmond, and Kansas City Districts noted increased wage pressure due to the difficulty in attracting and retaining truck drivers. A staffing firm in the Chicago District reported some companies were also willing to raise rates for unskilled workers to reduce turnover, and contacts in the Atlanta District noted increasing entry-level wages.

This goes along with what we saw in the most recent JOLTS report, which shows that employees in the retail sector are quitting at accelerated levels.

more...

http://www.bloomberg.com/news/articles/2015-03-05/we-just-got-another-big-clue-about-why-walmart-is-raising-wages

[tridim]

1. Costco has no problem attracting and keeping workers

BECAUSE THEY PAY A LIVING WAGE AND BENEFITS.

Walmart knew this 10 years ago and they did nothing.

[Populist_Prole]

7. Bingo

Plus, Costco is kicking Walmart's ass.

[Wellstone ruled]

2. Wal Mart has tons of issues going and Labor is just one item.

Been in the Grocery Food Wholesale Retail business for fifty plus years. Observation from our last weeks household items replenishment outing. Just so happens we went to three retailers do the fact that one item we use is only available at Wally World. Taking Wally first,inventory on the shelf,tons of open slots,facings were a mess,notice a huge increase in all of their paper products retail prices, which by the way are over weighted towards GP(Koch),and this is the only retailer that carries the one item from Scott Paper we use. Their stores need tons of TLC,meaning they need to hire tons of people just to stock their shelves. Kroger has ramped up their Image,cleaned up the store and really improved their customer service as well as Albertson/Safeway/Vons have really cleaned up their act.

[gelsdorf]

4. Totally agree

I had over 40 years in grocery, the out of stock not only @ Wally World but Target are huge. I asked a WM manager when did you start selling air? As I confused him with that question, I said look at the holes on your shelves, you are selling air. He may still be baffled

[Wellstone ruled]

5. Did not want to be so damn blunt,did confront the Mgr. on duty.

Asked her is she always did their stocking during the Power Hours and she said what is a Power Hour,Duh. Commented to her as to why they have so many out of stocks,well the truck might have been late,good grief their Warehouse is two miles down the road. And other biggee,I'am a bit under staffed today. Well lady,your store looks like this every time we come in here. Turned and walked away after our comment. Just for your info,our Kroger/Smith will be carrying the one Paper Item we need as of next week as per their MOD. And at a lower price.

[Sherman A1]

6. Same here

40+ years in the biz and simply amazed by the folks that think they can run a grocery store. Retail Grocery is hard, repetitive work. It's not rocket science but it's not the easiest thing in the world either. No store can be all things to all customers, but you have to have fair pricing, reasonable service and most of all something on the shelf to offer the public.

The local Target is famous for O.O.S.'s and we have a new Wal Mart being built. The nearby one in Ferguson, MO was converted to the grocery format a few years back and they sent out $5.00 gift card/coupons to the neighborhood. I went over the first week to use it and the place was simply trashed, with more empty shelves than there things to buy. I found a bundle of bathroom tissue used the coupon and never went back (not that I would have anyway, but they were giving away $5.00 so why not?)

[YarnAddict]

3. So--

--market forces??

[Sparhawk60]

8. Sadly, Yes

If they can’t hire enough people at $7/hr., they will be forced to pay more.

Of course, in my fantasy world, the entire Wal-Mart clan would get together and announce that they have enough money, and from now on, the starting pay at Wal-Mart will be $15/hr. with pay raise up to $20+/hr. after a few years on the job.


/ Then I wake up
// sobbing in my pillow
/// because I just got to the part in my fantasy where my super model wife and her twin sister tell me they have a special treat for me
//// sad because the part about the super model and her twin is more likely to happen than Wal-Mart paying a living wage.

[Iwillnevergiveup]

9. Big deal - "next year" is a long way off

Could be 21 months away if it happens in December 2016. And $10 an hour is nothing to brag about anyway.