6-2 Short Paper: Minimum Wage
Heather Milton
Southern New Hampshire University
Page 1 of 4
There is always a constant debate in the United States concerning the federal minimum
wage. With constant inflation on goods and services, is $7.25 per hour enough for an individual
or family to survive on? Several studies indicate this is not possible without the minimum wage
employee seeking government assistance. As a result of this issue, there are labor activist groups
throughout the country that constantly put pressure on employers to pay wages that can allow an
individual or family to survive on their earnings without seeking government assistance
In light of these current issues, Walmart announced that they will be raising their minimum
wage to $9.00 per hour in April 2015 and to $10 per hour by February 2016 (McMillion, 2015)
This action was taken by Walmart mainly because of the constant pressure from labor activist
groups, but not because of supply and demand. Walmart had to act on their pay scales because of
increasing public criticism and high employee turnover while Walmart's profits continued to rise
was negatively affecting the company's reputation (Hiroko, 2015). Walmart, as a retail giant, is
aware of supply and demand and inflation costs. There is inflation on an annual basis. If Walmart
really valued their employees, they would consider the cost of inflation when setting wages for
their employees.
Labor activists are calling for Walmart's minimum wage rate to be $15 per hour. This called
for rate may be a little far-fetched for some companies, even Walmart. Once you raise something
it is hard to take it back without major repercussions. Some cities or states do in fact have a
higher minimum wage due to the cost of living in that area, for example, Seattle, Washington and
San Francisco, California (Hiroko, 2015). Walmart has undeniably waited too long to address
their wage issue, but some credit is due for the action steps in resolving the issue. A five plus
dollar increase in Walmart's minimum wage could be detrimental in that it would be setting a
precedent for not only Walmart but the retail market and Walmart's competitors. Moving forward
Page 2 of 4
Walmart needs to evaluate what a true cost of living wage should be and make adjustments
where necessary. Furthermore, an annual review of supply and demand and inflation needs to be
factored into Walmart employee's annual increases.
The federal government minimum wage is defiantly the foundation of Walmart's criticism. If
the federal minimum wage was higher than $7.25, Walmart would have to comply with higher
wages. This is an issue that carries a 50/50 blame on the federal government and employers. The
federal minimum wage is long overdue for an increase. The last increase was in July 2009 when
the rate increased from $6.55 to $7.25 (Be Buinessed, 2018). Since 2009 inflation has been an
average of 1.79% (Inflation.edu, 2018). There are defiantly many pros and cons related to raising
the federal minimum wage