What is it like to work at Walmart

Largest US employer, Walmart, pays employees more salaries

Raising the state minimum wage is challenging corporations like Walmart. More than two thirds of the US economy lives from private consumption.

When the largest US employer raises its employees' salaries, the president of the world's largest economy also speaks out. "Walmart is raising salaries - not only because it is right to do that - but also because it is good for business," Barack Obama said last. The largest US employer pays more wages - a trend-setting signal for the world's largest economy?

"Since 1979, the vast majority of Americans have seen their hourly wages stagnate or fall, despite the fact that economic output has risen 149 percent and productivity has increased by 64 over that period," says a new study by Elise Gould of the Washington think tank Economic Policy Institute. Walmart has so far been seen as a negative example of low pay.

Why is America's largest retailer raising wages now? Even if Wal-Mart boss Doug McMillon writes in the best corporate manner that Walmart wants to demonstrate its commitment to its partners, the employees, in many branches only the increase of the legal minimum wage is imminent and this wants to forestall the Walmart management.

44 percent new staff every year

Walmart has hit a dead end with its low salaries. "The business model is broken," comments the well-known financial blogger Barry Ritholtz. The management simply miscalculated. Walmart has to replace around 44 percent of its workforce every year. However, this is expensive: with 2.2 million employees, finding personnel costs a lot of time and money. In addition, the mini-wages depress motivation, which affects business.

Walmart's dilemma is well expressed in a few figures: the company has a poor rating of 2.8 stars on the Glassdoor.com career portal. Only 44 percent of users would recommend a friend to work there. At competitor Costco, it is 3.9 and 80 percent. McDonald's, for example, does better with a rating of 3.0 and 50 percent recommendations.

US economy thrives on consumption

Against the backdrop of the improved economy - US unemployment is 5.7 percent, its lowest level in more than six years - Walmart may simply have seen the signs of the times. In January, hourly wages in the US rose by 0.5 percent, as fast as they were last in November 2008. Corporations like Walmart may simply have to rethink in order to be able to compete for labor.

Economists hope so. In contrast to the export-dependent German economy, more than two thirds of the US economy is driven by private consumption. Rising wages in the lower income bracket create a lot of purchasing power and are therefore one of the most effective means of stimulating demand. Therefore, there could be a strong growth spurt if other large retailers like Target, or the fast-food industry, which on average is even worse paying, followed Walmart's lead.

Walmart plans to raise the average pay of part-time workers to 10 and full-time workers to $ 13 an hour. The starting salary is expected to rise to $ 9, which is $ 1.75 above the legal minimum wage. Due to the large number of jobs, this is very expensive for the group. Even so, the increase in salaries for most employees is rather modest.

(APA / dpa)