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Walmart wage hike signals broader gains

Reuters
Saturday, January 13, 2018

WASHINGTON - Walmart's tit-for-tat minimum wage battle with Target, ratcheting to $US11 ($F22) an hour for the least experienced workers with likely pressure to move higher, may signal broader gains to come for workers in a tightening US labour market — a moment politicians and policymakers have been hoping for.

There are still problems, labour economists note, with overall wage gains weaker than would be expected with a 4.1 per cent unemployment rate, comparatively large numbers of people in part time jobs, and millions of prime age adults between 25 and 54 years old not even looking for work.

But the Wal-Mart Stores Inc announcement, its third boost in entry level wages in as many years, is a possible sign wage pressure is building in general, as gains filter down to the lowest-paid jobs and the least-educated workers.

"This may be evidence that we are starting to see the wage acceleration," that officials at organisations like the Federal Reserve have been anticipating as unemployment dropped to a 17-year low, said Jed Kolko, chief economist at the jobs website Indeed.

That, in turn, could boost US economic growth overall and strengthen a US inflation rate whose weakness has bedeviled the Fed for the last five years.








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