Famous for low wages, terrible working conditions, and bringing crappy Chinese junk to every living room in America, Walmart has had a flash of genius. If they want to improve sales they should pay their employees more.
It’s amazing they didn’t see the business correlation between employee satisfaction, employee quality and profit sooner. It still doesn’t address the fact that a business that doesn’t pay a liveable wage shouldn’t be considered successful.
“The management philosophy that became popular in the 1980s that led companies to cut pay for low-wage workers, fight unions and contract out work may have been profitable for the companies that practiced it in the short run,” said Alan Krueger, a Princeton economist and leading scholar of labor markets. “But in the long run it has raised inequality, reduced aggregate consumption and hurt overall business profitability.”
To fix it, executives came up with what, for Walmart, counted as a revolutionary idea. This is, after all, a company famous for squeezing pennies so successfully that labor groups accuse it of depressing wages across the American economy. As an efficient, multinational selling machine, the company had a reputation for treating employee pay as a cost to be minimized.
But in early 2015, Walmart announced it would actually pay its workers more.
That set in motion the biggest test imaginable of a basic argument that has consumed ivory-tower economists, union-hall organizers and corporate executives for years on end: What if paying workers more, training them better and offering better opportunities for advancement can actually make a company more profitable, rather than less?
How Did Walmart Get Cleaner Stores and Higher Sales? It Paid Its People More http://nyti.ms/2e5IgCj