April Fooling aside, beginning today April 1, 2015, Wal-Mart will be giving their lowest paid employees a raise to $9 an hour. Following this, employees will see yet another increase to $10 an hour in February of 2016. Overall, over half a million Wal-Mart employees will be affected by the wage increase.


In a blog posted on their store website, Chief Executive Officer Doug McMillon cites the reason for the raise as an act of benevolence, stating that Wal-Mart focuses on the potential of their employees. According to McMillon, the company strives to set their employees out for success.

Nevertheless, from an economics standpoint, there are a couple different reasons why Wal-Mart decided now to increase the wages for their lowest paid employees.

Many labor unions have criticized Wal-Mart for underpaying their employees across the nation. While the company argues that their full-time hourly wage is $12.92, this excludes all employees who work part-time because their hours have been cut. In addition, over 30,000 part-time employees of Wal-Mart recently had their insurance benefits cut. According to Bloomberg News, low-paid Wal-Mart employees receive approximately $2.66 billion in government aid each year.

In addition, overall economic recovery over the past few years has decreased the unemployment rate while subsequently increasing the number of jobs. Companies across the country have realized the need to increase wages in order to decrease employee turnover; to keep their best employees, as well as to attract more qualified ones too. With this mindset, it is clear that Wal-Mart’s wage increase may not be a unique one, as other retailers will follow suit to keep in line with the demands of the economy.


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