Economist: Wal-Mart Wage Increase Likely Won't Affect Prices

WEST SACRAMENTO (CBS13) — The nation's largest retailer will give hundreds of thousands of employees a raise this spring, as Wal-Mart will give 40 percent of its employees a larger paycheck.

Pay will increase to $9 an hour across the nation in April, which is the current minimum wage in California. It will increase next year to $10 an hour in February of next year a month after California's minimum wage also reaches $10 an hour.

Workers say they've been waiting for a wage increase for a long time. For them, it makes a big difference in what they spend for the basics.

It feels like a regular day for workers at the Walmart Supercenter in West Sacramento, but Louis Angel feels a little more motivated than he did yesterday after Wal-Mart's announcement that it will bump pay to $9 an hour across the nation, and after his own recent raise.

"I work hard and I get noticed and the only thing I really want is a pat on the back—you know thanks for all the hard work," he said.

For workers outside of California, that could mean an increase of nearly $2 above the current federal minimum wage of $7.25.

But many shoppers don't like the sound of it.

"It's tough," said Debbie Jensen. "People getting paid extra wage but it's making it hard on us the people who don't have a job."

She's disabled, unemployed and recently widowed. She's even applied for a job at Walmart, and says workers deserve recognition, but not on the backs of consumers.

"They're going to have to raise prices in order to afford to pay them," she said.

Maybe not. Wal-Mart says the wage hike will cost the company $1 billion this fiscal year. That's a drop in the bucket for the company, according to Sacramento State economist Sanjay Varshney.

"Walmart is a very competitive industry and they likely cannot pass on that cost to consumer," he said.

It's not worth it for the biggest company in the nation to pass on costs, meaning there will likely be no impact for the local shopper, he says.

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