Wal-Mart facing employee backlash over hourly raises

Dive Brief:

As Wal-Mart’s hourly wage boost takes effect, some of the retailers’ workers are not too happy about it.
Some of Wal-Mart's workers that had already worked their way up to higher hourly rates are aggrieved that newer employees are awarded those rates upon their arrival, airing their grievances on Facebook and interviews with Bloomberg.
The retailer says it anticipated such sentiments and is working to provide all employees with opportunities for pay raises and advancement to higher paying work.

Dive Insight:

Like the Seattle entrepreneur who’s facing a backlash from his more senior employees after raising his minimum starting salary to $70,000, Wal-Mart is finding that some of its more senior hourly workers feel ripped off. Jeannette Wicks-Lim from University of Massachusetts, Amherst, told Bloomberg that it would cost Wal-Mart approximately $40 million to give additional raises to more senior employees.

“It is pitting people against each other,” 10-year Wal-Mart employee Charmaine Givens-Thomas told Bloomberg. “It hurts morale when people feel like they aren’t being appreciated. I hear people every day talking about looking for other jobs and wanting to remove themselves from Wal-Mart and a job that will make them feel like that.”

Labor experts say that it behooves companies to maintain an “internal wage ladder,” as economic analyst David Cooper calls it, or face disgruntlement from those who reached those upper wages through months or years of dedication and hard work.

“Companies want to preserve some type of internal wage ladder, so to do that they have to adjust wages of folks above the new minimum,” Cooper told Bloomberg. If not, “folks are going to leave or start complaining more vocally.”

Still, to some extent, the situation is a normal falling out that simply happens when change occurs. In an economy where there are more opportunities, workers are likely to seek out the best paying jobs with the best opportunities for advancement and the best working conditions. If Wal-Mart can provide good jobs, it will get good employees.