Are higher wages about to become a trend? Aetna's CEO recently announced that the company's lowest paid workers will get a large raise--from $12 to $16 per hour. Wal-Mart followed up on Thursday with news that it will increase its lowest wage from $9 to $10 per hour. Wal-Mart department managers will also see a starting wage increase--from $13 to $15 per hour.
Wal-Mart is the largest private employer in the U.S. The change will affect 500,000 employees, including workers at the Wal-Mart-owned Sam's Clubs. Wal-Mart CEO Doug McMillon made the announcement while reiterating his "commitment to you, our associates." Writing about Aetna's move in the New Yorker, James Surowiecki points out that: "job turnover was costing Aetna a hundred and twenty million dollars a year. Better-paid employees tend to work harder, too." That hard work may be the ultimate advantage in a competitive environment where technology quickly levels most first-mover advantages. Wal-Mart's increase will raise pressure on its competitors--from Target to the beleaguered McDonald's--to do the same.
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