The commitment of Walmart Inc. raising its average hourly wage by more than $ 15 comes amid a debate in Washington over whether to double the federal minimum wage.
The retailer’s goal is politically significant because it aligns with President Biden’s proposal to increase the federal minimum wage to $ 15 per hour from $ 7.25 per hour that has been in place for 11 years. It also comes from the nation’s largest private employer, with stores located in various labor markets across the country.
Walmart’s announcement on Thursday is not a support for Mr. Biden’s plan, which is part of a $ 1.9 trillion Covid-19 aid proposal by Democrats in Congress that is expected to move to the House later in this month. The company supports a higher federal minimum wage, but not $ 15 per hour. While it intends to raise the wage for 425,000 workers per hour from an average of over $ 14 in January 2020, its minimum starting wage would remain at $ 11 per hour.
However, the company’s move could play into both sides of the federal minimum wage debate.
Democrats backing Mr Biden’s salary plan may argue that Walmart’s pay rises are proof that employers can afford to raise their wages, despite the pandemic’s economic turmoil, economists and analysts say. Republicans who oppose doubling the federal ceiling will likely see it as an example of effective free market forces, arguing that the government should not intervene.