Walmart CEO calls for an Increase in the Minimum Wage*

Written by Dr. Amy K. Glasmeier on 06/12/2019

On the same day, Eric Ravenscraft writing in the New York Times presented a distillation of the living wage discussion in the U.S., the CEO of Walmart went on record indicating that in his opinion the minimum wage was too low. In several of our analyses, we demonstrate this fact by mapping the country at the county level to identify places where the minimum wage and the living wage are equal. Few counties in America have a cost of living that can be managed based on a pay rate equivalent to the minimum wage.

As the largest employer in the country, CEO Doug McMillion of Walmart indicated, Congress should act to raise the minimum wage. For some time, Walmart has been increasing its starting wage to $11.00/hour. But according to citizen groups and many public officials, including Senator Bernie Saunders Walmart should raise the company's minimum wage higher and more in line with $15.00. Pushed about a possible $15.00/hour pay rate, at the Walmart Annual Corporate Board Meeting Saunders reminded McMillion that two of its largest competitors Costco and Amazon are either already paying a minimum starting salary of $15.00 (Costco) or are on record to be planning to pay $15.00 an hour in the near future. Also, Saunders reminded McMillion that by paying a low wage, Walmart employees are forced to seek subsidies from the federal government to cover the costs of health care, child care, and housing to get by.

Two months earlier, McDonald's announced it would not fight calls for raising the minimum wage, another sign that tight labor markets are resulting in pressure to raise minimum wages**. An increase in wages above the minimum wage is good for workers currently making below living wages. $15.00 might seem like a great deal of money, but based on the calculator, there are few places in the country where a $ 15.00-hour pay rate would cover your necessary costs. Cities are particularly high cost. With the growth of the population in urban areas, costs of living have been outstripping the costs for basics such as housing, health care, child care, and transportation costs. The average living wage as of January 2019 is above $16.14/hour.

*Walmart CEO: America's minimum wage is 'too low.' Nathaniel Meyersohn, CNN Business Wed June 5, 2019

**McDonald's Decides to Stop Lobbying Against Minimum Wage Hikes." Erin Corbett. Fortune. March 27, 2019.