In a bold move, several big retail chains announced they’d be increasing worker wages this spring from the federal minimum wage. Among retailers so far are Walmart, TJ Maxx, Marshalls, HomeGoods, and other TJX stores.
No doubt this announcement is part of an effort to boost the image of the retail industry while attracting and retaining employees with better compensation. It’s no surprise this effort follows a wave of highly publicized organized worker protests and lawsuits claiming these markets take advantage of cheap labor.
How wage hikes benefit the retail market
Retail work is difficult by any stretch of the imagination. Anyone who’s ever worked retail can attest to the long hours of physically challenging labor, insanely rude customers, tough sales quotas, and other frustrations that put added pressure and stress on even the most skilled employees. With many retail employees working for minimum wage, it’s understandable the industry would have very high turnover rates, leaving recruitment teams continually scrambling to fill open spots.
Paying retail employees higher wages enables them to earn more, which in itself can be a good incentive to stay on board. This wage increase also could benefit the retail market by:
- Sending the message to the world that employers have listened to their employees’ requests for better pay.
- Making it appealing for candidates seeking longer-term employment to apply.
- Boosting employee morale and increasing employee retention.
- Helping to create a more positive work environment, which could lead to better treatment of customers and increased sales.
- Giving employees more disposable income to spend at retailers like Walmart, TJ Maxx, etc.
Will wage increases influence related industries?
The question on everybody’s mind is whether the raise in wages for the biggest names in retail will have a positive influence on related industries. (The news from TJ Maxx and Marshalls followed Walmart’s announcement, and Walmart’s announcement followed a statement from major insurance provider Aetna.)
If so, what these employers started could create a snowball effect for other, typically low-paying industries to mimic. Why not? It makes sense to pay people better, because happier employees create happier customers and a stronger economy.
According to The New York Times, the average hourly wage for nonmanagers has risen only a paltry 2 percent per year during the past 5 years. Wise compensation managers know that now is the time to get on board with more generous starting wages and progressive pay raises. These changes will attract better employees, which helps to secure the future of any organization.