The landscape: While retailers struggle to keep costs in check, they’re also having to consider raising wages to attract and retain workers given the tight labor market. Moreover, without adequate staffing, they may not be able to deliver a quality customer experience.
- That’s why Walmart, the largest private-sector employer in the US, is increasing its starting wage 17% to $14 per hour from $12 next month, per a company blog post.
- It is also investing in higher wages for its current employees; its hourly average will rise to $17.50, up 2.9% from last summer, and 6.7% more than in September 2021, per Bloomberg.
Merchants that fail to boost wages can face significant challenges.
- For example, hundreds of UK Amazon workers on Wednesday staged their first-ever strike. The retail giant failed to “give workers a proper pay rise,” said Stuart Richards, senior organizer of the GMB Union, in a statement. Amazon in December had offered workers a 50 pence-per-hour increase in pay.
Workers have leverage: While the labor movement is losing momentum, workers continue to have significant leverage over employers given that the unemployment rates in the US, UK, and continental Europe are near all-time lows.
- The US unemployment rate is 3.5%, and 3.6% among retail and wholesale workers, per the US Labor Department.
- The UK unemployment rate is 3.7%, per the UK’s Office for National Statistics.
- The EU unemployment rate is 6.0%, per Eurostat.