Author: Derek Ramirez
Walmart has previously announced that it will raise the starting pay for full-time and part-time employees at its U.S. locations. In a report released by the company, starting in April, associates will earn at least $9 an hour. Next year, by Feb. 1, 2016, current associates will earn at least $10 an hour. The raise will also cover managers’ roles, which will move to at least $13 an hour this summer and $15 an hour next year. The program will offer new associates a six-month, skills-based, training program which will guarantee them at least $10 an hour upon successful completion. According to Walmart's website, the retail chain has 49,084 associates at 210 locations in North Carolina as of November 2014.
Like us, you’re likely wondering if $10 an hour really moves the needle at the industry and statewide level. To answer that, we turn to the most recent Occupational Employment and Wage data from LEAD. We can use the estimate for typical entry-level retail sales workers at the state level to see how much more $10 an hour would be. According to our data, the typical entry-level worker in retail sales makes around $8.14 an hour, statewide. The median wage (where half of all workers make below the amount) is $8.82 an hour for cashiers and $9.77 for retail salespersons. Since those two categories make up more than six percent of all occupations in the state and Walmart is the largest retail employer in the state, we gather that many workers in these positions will get a pay increase once the new wages take effect.
Will the increased wages make a difference to all areas of the state? Potentially, yes. The effect could be felt in many counties in the state. Walmart was a top five employer in 21 counties and a top 10 employer in 38 more during the 2nd quarter of 2014, according to LEAD’s Largest Employer data. This type of dispersion around the state brings to mind the old adage, “A rising tide lifts all boats.” If workers with similar skills can make $10 an hour at Walmart, other employers may have to increase their wages or provide workers with other benefits (paid or sick leave, flexible hours, or medical insurance) to stay competitive in the “war for talent” alluded to by Panera Bread Senior Vice President for Planning Mike Bufano. Either way, the potential is there for hundreds or thousands of additional workers in our economy to see benefits.
Everyone wants to make more money, but how important is wage growth for workers in the Retail sector? In the chart below, you can see the sector’s real wage growth for selected North Carolina industries.
Sectors such as Professional, Scientific, and Technical Services have experienced growth in real wages since 2000. Other growing wage sectors include Information, Utilities, and Wholesale Trade. On average, North Carolina has seen only a small increase in wage growth compared to 2000. Retail Trade is one of the industries that has experienced the biggest decline in real wages, along with sectors such as Educational Services and Accommodation and Food Services. In all, the sectors with declining real wages employ more than 54 percent of North Carolina workers. Another important note is that department stores, which include Walmart, are among the sectors with the lowest real wages. Hopefully Walmart’s new policy will help lift the wages in this sector and others, making it a potential big win for North Carolina workers.