Global Investor

A good wager

Arvind Jayaram | Updated on March 10, 2018 Published on February 22, 2015

Wal-Mart CEO McMillon gives workers a raise



Wal-Mart CEO Doug McMillon, who got his start at the massive US retailer three decades ago, has finally given in to workers’ demands to hike salaries.

The company has announced a raise in the minimum hourly wages it pays its employees, both full-time and part-time, to $9 an hour from April and at least $10 starting next February. The company will be investing $1 billion more in its employees on wages and benefits such as training, as a result of this change.

With the hike, McMillon has signalled that he hasn’t forgotten his roots at Wal-Mart. He worked as an assistant manager and a buyer for the retailer, did a stint at Sam’s Club and then led the company’s international operations. The announcement about wages wasn’t a complete surprise, as McMillon had hinted before that the company would raise the pay of its lowest-rung workers.

Low pay

For many years, Wal-Mart has been widely criticised over its low pay and increasing reliance on part-time workers.

The company had experienced high attrition as workers moved to higher paying jobs at other retail competitors.

The company has said only about 6,000 of its 1.3 million US employees currently earn the Federal minimum wage requirement of $7.25 an hour. The average wages of its part-time and full-time staff are at $9.48 and $12.85 an hour respectively.

Good move

With the US economy looking up and its unemployment rate dropping from the near 10 per cent five years ago to 5.7 per cent currently, labour friendly policies today make business sense. But this apart, the salaries paid to Wal Mart staff may eventually find their way to its own stores, as the employees spend more, aiding revenues.

And motivated employees may lead to more satisfied customers and an increase in sales and profits too.



Published on February 22, 2015
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