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Wal-Mart Raising Wages as Market Gets Tighter

Wall Street Journal (02/19/15) Paul Ziobro; Eric Morath

The world’s biggest retailer is taking steps to retain its workers amid a strengthening U.S. labor market that is creating more options for job hunters. Wal-Mart Stores Inc. announced yesterday that it will increase pay for its U.S. hourly workers to at least $10 an hour by next year. The move comes as the country’s jobless rate has dropped nearly a full percentage point in the last year to 5.7% in January, a sign of diminishing slack in the labor market.

“Wal-Mart’s move to raise their employee pay base is a sign that the labor market has already tightened,” says Joel Naroff, chief economist at Naroff Economic Advisors. “Their action could create a floor under wages and others may need to follow in order to retain and attract workers.” Other companies including Starbucks Corp. and Aetna Inc. recently have raised wages to retain and attract workers.