Target Takes the $15 High Road. Where’s Walmart?

Target Takes the $15 High Road. Where’s Walmart?

Target, one of the largest retail employers in the country, announced Monday that it will raise its minimum wage for employees to $11 an hour starting in October, and gradually increase it to $15 an hour by the end of 2020. The new standard applies to Target’s 323,000 regular employees as well as to the 100,000 seasonal workers it plans to hire for the holiday season.

Clearly, Target realizes that the way to attract workers (and reduce turnover) in a tight labor market is not to gripe and moan about a supposed labor shortage but to bump up pay. As the Federal Reserve of Minneapolis President Neel Kashkari put it, “If you’re not raising wages, then it just sounds like whining.”

Walmart’s decision to raise its pay to $10 an hour last year prompted Target to follow suit. Company officials initially required new employees to complete a six-month “training” period before receiving that wage rate. After intense public criticism, they shortened that period to 90 days. Other employers took to the high road years ago. Costco has for several years now paid a starting wage of $11.50 an hour with average wages reaching $21 an hour. The retailer also offers health care to most employees.

But Walmart has more power than any American company to lift up wage standards across the economy. With nearly 1.5 million employees in the United States, Walmart is the largest employer in the country. Yet, Walmart has thus far resisted calls to go higher than $10 an hour. It is nearly impossible to make a living on that kind of wage, especially if you’re working part-time—as many Walmart employees do.

The retail behemoth’s low wages, which force its employees to rely on public assistance programs, cost taxpayers an estimated $6.2 billion in 2013. Employers who insist on taking the low-wage road act as parasites and end up costing taxpayers $152.8 billion every year, according to a 2015 study by the University of California, Berkeley Labor Center.

Target is taking a step in the right direction by getting on a path to $15 an hour. Walmart should follow suit. It can certainly afford to pay its workers more money. In recent years, the company has bought back about $50 billion of its shares, funneling those profits into the Walton family fortune rather than into workers’ pockets. 

By paying at least $15 an hour, the company would not only be treating its own employees fairly; it would be lifting up wage standards throughout the economy. To focus the minds of company officials at Walmart and elsewhere, a group of House Democrats have kickstarted an idea: levy a fee on companies equivalent to the amount of public assistance its employees are eligible to receive, since their employers can’t be bothered to pay them fairly in the first place. 

Tax Cuts for the rich. Deregulation for the powerful. Wage suppression for everyone else. These are the tenets of trickle-down economics, the conservatives’ age-old strategy for advantaging the interests of the rich and powerful over those of the middle class and poor. The articles in Trickle-Downers are devoted, first, to exposing and refuting these lies, but equally, to reminding Americans that these claims aren’t made because they are true. Rather, they are made because they are the most effective way elites have found to bully, confuse and intimidate middle- and working-class voters. Trickle-down claims are not real economics. They are negotiating strategies. Here at the Prospect, we hope to help you win that negotiation.