McMillon: Walmart Will Feel Financial Effect of Wage Raise For 2 Years
by June 22, 2015 12:00 am 152 views
Wal-Mart Stores Inc. CEO Doug McMillon on June 11 discussed the company’s decision to raise its starting wage at the 15th annual Emerging Trends in Retailing Conference at the Northwest Arkansas Convention Center in Springdale.
In the wake of the company’s most recent shareholders meeting (June 5) and a reported drop in profit for the quarter that ended April 30, McMillon said Walmart will likely, during the next two years, feel the financial effects of raising its starting wage.
McMillon recalled a pivotal moment in a Denver store that helped spur his realization that wages needed to be raised.
The store manager pointed to a food truck in the parking lot and said, “They pay $10 an hour to start, and we pay $9.”
McMillon said he thought that was wrong and decided to fix it.
Walmart had been focused for years on cutting costs, he said. “We went too far and found ourselves in a ditch on the side of the road. Now, we’re trying to steer back to the middle of the road, without falling into a ditch on the other side.”
The wage raise was announced in February, and the company got the ball rolling earlier this spring with a bump up to $9 per hour for newly hired employees. The company’s plan is to raise all wages to at least $10 per hour by next February.
The Emerging Trends in Retailing Conference is put on by the Walton Center for Retailing Excellence, in the Sam M. Walton College of Business at the University of Arkansas.