The increase in the minimum working wage in the US is set to have a massive impact on Wal-Mart stores according to a report from Reuters.
Reuters gained access to an internal memo sent within Wal-Mart which detailed how the increase in the minimum wage would affect the base salaries in 1,434 stores and would have an impact on around a third of the total number of locations of the stores across America.
Wages are to be increased in 21 states across America on January 1, 2015 and are set to affect a large number of workers who ae struggling to keep up with basic bills and costs while surviving on a minimum wage income.
According to Reuters these are adjustments that Wal-Mart and other employers have to make each year, but growing attention to the issue has expanded the scope of the change. Thirteen U.S. states lifted the minimum wage in 2014, up from 10 in 2013 and 8 in 2012.
Wal-Mart spokeswoman Brooke Buchanan said to Reuters that the company was making the changes to “ensure our stores in the 21 states comply with the law.”
Wal-Mart continues to be the biggest private employer in the United States with 1.3 million workers, so when there are changes to minimum wage legislation the impact can be enormous on the company which manages to keep prices low in stores by working to very tight margins across the company.
According to Reuters, the Wal-Mart memo shows that there will be changes to its pay structure, including a narrowing of the gap in the minimum premium paid to those in higher skilled positions, such as deli associates and department supervisors, over lower grade jobs. Wal-Mart will also combine its lowest three pay grades, which include cashiers, cart pushers and maintenance, into one base rate.
“Essentially that wage compression at the upper level of the hourly associate is going to help absorb that cost of the wage increase at the lower level,” said the manager, who spoke on condition of anonymity to Reuters