Congressional Republicans are in a position to block every effort to raise the federal minimum wage, but the economy is moving on without them.
Some of the nation’s largest retailers – Gap, Ikea, and Wal-Mart, among others – have already raised their company’s minimum wages. Today, another major retailer joined the club, reinforcing the larger trend [edited, see update below].
Less than a week after Wal-Mart announced that it would raise wages for 500,000 employees to $9 an hour in April, off-price retailer TJX said in its fourth-quarter earnings report that it, too, will boost pay.The parent company of T.J. Maxx, Marshalls and HomeGoods said Wednesday its full- and part-time hourly U.S. employees will earn at least $9 an hour starting in June. In 2016, all hourly U.S. workers who have been with the company for six months or more will earn at least $10 an hour.
Remember, as was the case with Wal-Mart, this is a done deal – it’s a private-sector move, which will occur regardless of Congress’ wishes.
In terms of the broader economy, anytime one announcement means a half-million Americans are going to have a bigger paycheck, that’s encouraging news, but there’s a larger takeaway from these developments that’s even more heartening.
As Danielle Kurtzleben noted after the Wal-Mart news last week, announcements like these from major retailers offer fresh evidence of an improved labor market.
After all, one of the closest-watched indicators in recent monthly job reports has been hourly wages. If those tick up, it’s a sign that the labor market is tightening, and that employers have to raise wages to hold onto or attract the talent they want. Last month, the jobs report showed that pay is already increasing, with average hourly wages jumping by 12 cents, the biggest jump in nearly eight years.Walmart’s announcement signals that the company wants to keep attracting good talent and doesn’t want to lose its workers to competitors – which in turn signals that there’s increased competition to get good workers.
Right, and as Wal-Mart looks for an advantage against its competitors, TJX moves to keep up, so it’s lifting wages, too. Their rivals will feel pressure to do the same, and so on.
It’s discouraging to know many Americans will continue to work at the federal minimum of $7.25, and won’t benefit directly until the Republican-led Congress is either replaced or changes its mind, but the broader trend is clearly moving in the right direction.
Update/Correction: The second paragraph originally suggested GOP lawmakers might somehow disapprove of private-sector businesses raising their own workers’ wages, which was a foolish way to put this. Obviously, Republican lawmakers, like everyone else, want businesses to raise wages whenever they want to raise wages. I’ve edited the above text accordingly.