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By Mark Friedman
Arkansas Business, April 6, 2015

Wal-Mart Store Inc.’s announcement in February that it would start paying employees $9 an hour this year and $10 in 2016 touched off a minimum wage arms race.

Shortly after that news broke, TJX Cos. of Framingham, Massachusetts, which operates T.J. Maxx and Marshalls, said it would raise its minimum wage to $9 an hour, and Target Corp. of Minneapolis followed suit.

The wage announcements by other retailers didn’t surprise Ann Hodges, a labor and employment law professor at the University of Richmond in Virginia. “It’s pretty much what I thought would happen because Wal-Mart is the industry leader just by virtue of its size,” she said. And she said the move will benefit low-wage workers in other sectors such as the hospitality industry because both fields compete for the same pool of workers. ...

The increase in pay was a change that Wal-Mart had to make, said Howard Davidowitz, chairman of Davidowitz & Associates Inc., a national retail consulting and investment banking firm in New York. The labor market is getting tighter, and a number of Wal-Mart’s competitors were already paying $9 per hour or more. In addition, union groups have continued to hammer Wal-Mart for not paying higher wages. ...

With 1.2 million employees in the U.S., Wal-Mart is the nation’s largest private employer. The bump in pay is expected to impact 500,000 of the retailer’s workers.

While some groups praised the Bentonville retailer for increasing the hourly wage, others complained that it did not go higher.

“Certainly it’s great that they did this,” said Alissa Barron-Menza, vice president for Boston-based Business for a Fair Minimum Wage, which calls itself a national network of business organizations, business owners and executives who believe a fair minimum wage makes good business sense. “At the same time, many employers are already at this level or higher. And so we believe that they should have done more.”

Barron-Menza said Costco Wholesale Corp. of Issaquah, Washington, starts its employees at $11.50 an hour. Last year, the Gap Inc. of San Francisco said it was bumping its pay to at least $9 an hour and then $10 this year. ...

Currently there are 29 states that have a higher minimum wage than the federal one. Arkansas voters approved an initiated act in November that increased the state’s minimum to $7.50 on Jan. 1 and will add another $1 per house on Jan. 1, 2017. ...

Barron-Menza said the workers will be happier that they are getting paid more.

“If you are being paid enough as an employee that you know you can pay rent, you know that you can put food on the table … you’re going to be able to focus more on your job,” she said. And typically the employer sees an increase in productivity when a business is paying a higher wage. ...

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Copyright 2015 Arkansas Business