Walmart Raises Wages and So Should You, Part 1

Last week, Walmart announced that it would be giving a raise to 40% of its workforce. About half a million employees will see their hourly wages rise to $9.00 in the next six months and $10.00 by 2016, well above the Federal minimum wage of $7.25 an hour. The company will be spending about $1 billion dollars in increased pay and revised training and promotion programs. Recently, many companies such as Gap, Ikea, and health insurance provider Aetna Inc. have raised wages for their workers, but as the world's largest private employer, Walmart's decision to increase pay will be more closely watched and could have a larger impact.

Over the years, a job at Walmart has become synonymous with rock bottom pay. An unstable labor market and stagnant job creation made it possible for companies, including the retail giant, to consistently fill positions that had low pay and unsteady hours. In 2013, Walmart had 23,000 job applications for 600 jobs, with an acceptance rate of 2.6%; that's twice as selective as Harvard University (The Washington Post, 3/28/2014). In the years following 2008, low wages were an effective method to maximize profits. However, as an increasingly optimistic labor market continues to favor employees and job seekers, companies may no longer be able to sustain low wages.

In December, the percentage of people looking for work hit the lowest level since 2007. The economy has created more than 3 million jobs in three months; the number of available jobs posted by U.S. employers rose to the highest levels in 14 years; and job quits increased to 2.7 million, their highest level in six years, a sign of workers' confidence in the job market. Although the future of job creation looks sunny, wage growth has remained stagnant. Since 2012, pay has shrunk for people at almost all income levels with the exception of the bottom 10%, which have seen higher wage growth due to state-sponsored minimum wage increases (Economic Policy Institute, 2/19/2015). However, any increase in wages does not do much good for workers since inflation is rising faster than the price of labor. The income for a typical worker today buys fewer goods and services than in 2006 (Pay Scale, 1/12/2015).

The trend of frustratingly stagnant wage growth could start to reverse as the economy continues to improve and the labor market continues to tighten. Walmart's move to increase hourly earnings has already turned the spotlight on other retailers who offer similarly low wages, such as Target and Staples. The wage hikes have also put a spotlight on food service companies like McDonald's, which has consistently been singled out as an organization that doles out rock bottom pay. Companies that could once offer low wages may be forced to increase pay in order to stay competitive, attract talent, and reduce turnover.

Raising wages is not just an advantage to the workers it benefits; it is also a boon for the organizations that employ them. Join us next week for Part 2 of our series and learn why all companies, not just Walmart, should raise their wages.the Benefits of Raising Wages.

Readers, do you think that companies should increase worker pay? Why or why not? Comment and let us know!
http://tradepost.selectfamily.com/index.cfm/2015/2/26/benefits-of-raising-wages-1

January Jobs Report

The U.S. economy continued to show strength in the first month of 2015; 257,000 jobs were added, and although the unemployment rate ticked up slightly to 5.7%, analysts estimate that the increase was due to more people looking for work in an optimistic job market (Bureau of Labor Statistics, Employment Situation Summary). The number of long-term unemployed persons was essentially unchanged at 2.8 million, accounting for 31.5% of the total unemployed. Hourly earnings also grew by 0.5%, the highest monthly wage growth since late 2008.

In January, job growth saw the most expansion in retail trade (+46,000), construction (+39,000), health care (+38,000), and finance (+26,000). Temporary help services saw little change from last month but was 6.7% higher than in January of 2014.

7 Hiring Trends to Watch in 2015

The job market has been bleak since 2008. Although the economy was in recovery, hiring increased slowly and wages were stagnant. However, the new year offers an optimistic hiring outlook. At 5.6%, the unemployment rate is back to pre-recession levels. More than 1/3 of employers are predicting to hire full-time, permanent staff this year (Career Builder, 1/1/2015), and employees are more confident that if they leave their current role, they will find a new one. Companies need to prepare for a positive job market this year where hiring tips back in favor of the job seeker.

1. Employers will add talent to their organizations.
Some 36% of businesses plan to increase full-time, permanent staff, a 12-point increase from last year. Jobs in sales, customer service, information technology, production, and administration will dominate the new opportunities (Career Builder, 1/1/2015). Many of these jobs will originate from small businesses; 30% of companies with fewer than 250 employees plan to add full-time staff. Temporary hiring will also pick up, with 46% of employers planning to hire temporary or contract workers; 56% of these companies plan to transition temporary workers into permanent roles (Business News Daily, 1/4/2015).

2. Workers will continue to fight the wage war.
With wage growth mostly sluggish since the recession, raising the minimum wage became a national debate in 2014. Some 21 states had increases that began on January 1, and by early this year, 29 states will have a minimum wage higher than the Federal wage (NCSL, 12/28/2014). As competition for highly skilled candidates increases, 82% of businesses plan to increase compensation in the coming year and 64% plan to offer higher starting salaries to new employees (Career Builder, 1/1/2015).

3. Companies will compete for highly skilled candidates.
Employers are adjusting education requirements to attract workers with advanced degrees; 28% of companies will be hiring more employees with master degrees, and 37% will be hiring more employees with four-year degrees (Career Builder, 1/1/2015). As job roles are becoming increasingly complex and data-driven, businesses will be competing for these highly educated and skilled candidates.

4. Unsatisfied employees will leave their roles.
In September, 2.8 million people quit their jobs, the highest level since 2008, signifying more confidence in the job market. Nearly ½ of all employees are optimistic about their ability to find a new job, and more than 1/3 report that they will look for a new position if they do not receive a pay raise in the next 12 months (Glassdoor, 1/9/2015).

5. Millennials will become the majority of the workforce.
In 2015, those born between 1981 and 1996 will become the majority of the workforce for the first time; 27% of this generation already inhabit management roles, and 47% want to transition into leadership opportunities (Elance-ODesk, 10/29/2014). Hiring and retaining Millennials poses a unique challenge, as 58% predict to leave their jobs in three years or less.

6. Mobile recruiting will expand.
As everything becomes more mobile, job searching is no different. Employment site Beyond.com found that 83% of those looking for work use their phone or tablet (Beyond.com, 6/17/2014), while Glassdoor found that nine in 10 job seekers are using mobile devices in their job search (Glassdoor, 5/13/2014). Utilizing mobile is one way that businesses can compete for top talent as 25% of seekers are deterred from applying if job listings are not mobile-optimized.

7. More people will leave the traditional career path.
Both out of choice and out of necessity, more workers will become freelancers and contract workers. The Internet's accessibility has allowed nontraditional career paths to become more legitimate and sustainable. Employers can now find and hire contract workers more easily, while freelancers can find those in need of their services and sell their labor. This year, 53 million U.S. workers were freelancing, and that number is only expected to grow (Elance-ODesk, 10/2/2014).

Readers, what are your hiring plans for 2015? Comment and let us know!
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December Jobs Report

The U.S. economy continued to improve in December; 252,000 jobs were added and the unemployment rate dropped another 0.2% to 5.6%, the lowest since June 2008, according to the Bureau of Labor Statistics' Employment Situation Summary. The number of long-term unemployed persons was little changed at 2.8 million, accounting for 31.9% of the total unemployed.

In December, job growth saw the most expansion in professional and business services (+52,000), construction (+48,000), food services (+44,000), and health care (+34,000). Temporary help services added 14,700 new jobs last month, up 7.8% from December 2013. Year-over-year staffing growth averaged 8.7% in 2014, compared with 6.4% in 2013.

November Jobs Report

The U.S. economy saw strong growth in November and added 321,000 jobs, the most in nearly three years, according to the Bureau of Labor Statistics' Employment Situation Summary. The unemployment rate remained at 5.8%. In contrast to recent months, average hourly earnings rose in November, and over the year hourly earnings have risen by 2.1%. The number of long-term unemployed persons was little changed at 2.8 million, accounting for 30.7% of the total unemployed.

In November, job growth saw the most expansion in professional and business services (+86,000), retail trade (+50,000), health care (+29,000), and manufacturing (+28,000). Temporary help services added nearly 23,000 new jobs last month, up 8.5% year-over-year.

Holiday Hiring: Highest Since 1999?

It's the most wonderful time of the year for retailers and consumers as the holiday shopping and hiring season has started to pick up. The last few months of the year, starting with back-to-school shopping in September, are important for retailers, and the winter holiday shopping sprees are particularly crucial for the businesses and the economy. Increased consumer optimism and escalated spending are predicted to make this holiday season especially jolly.

Consumer confidence is at its highest levels since 2007 (The Conference Board, 10/28/14), and increased optimism is prompting Americans to spend an estimated 4% more this year during the winter holidays; U.S. retail sales are projected to total over $900 billion in 2014 (Deloitte, 9/24/14). Households are also allocating larger budgets for presents, while holiday gift spending is predicted to increase 8% (Prosper Spending Score, 9/4/14). In 2013, nearly half of American consumers stated that they would be budgeting less for gifts, but that number dropped 11% for the 2014 shopping season.

Cyber Monday has continued to grow as one of the largest shopping days of the year and is expected to outpace Black Friday sales. Online purchases are forecasted to be especially strong for retailers, with over half of consumers expecting to make Black Friday purchases online rather than in-store and online sales for the five-day period between Thanksgiving and Cyber Monday are predicted to rise 15% (IBM, 11/9/14).

Consumer optimism and predictions of increased spending have prompted employers across all industries to escalate hiring for the holiday season. Retailers alone are expected to add more than 800,000 seasonal workers, the highest number since 1999 (Challenger, Gray, and Christmas, 09/17/14). Many notable companies have already started ramping up hiring. UPS stated it would hire 95,000 seasonal workers, nearly doubling last year's holiday workforce, while FedEx plans to add 50,000. Both companies struggled in 2013 to handle escalated shipping volume and are adding workers in order to meet the demand of this holiday season. Online retail giant Amazon plans to add 80,000 positions, approximately 10,000 of which will roll over to full-time jobs. Walmart and Target both plan to add around 60,000 workers. Macy's leads hiring among retail stores, adding 86,000 seasonal jobs.

Manufacturers and retailers couldn't have asked for a better gift this holiday season.

Readers, has your company added seasonal workers? Or are you planning on taking seasonal work?
Send us your comments at: http://tradepost.selectfamily.com/index.cfm/2014/11/13/holiday-hiring

October 2014 Jobs Report

October Unemployment RateThe U.S. economy added 214,000 jobs in October, according to the Bureau of Labor Statistics' Employment Situation Summary, and the unemployment rate fell to 5.8%, its lowest level since 2008. Wage growth remained sluggish, with average hourly earnings rising only three cents last month. The number of long-term unemployed persons dropped to 2.9 million and accounted for 32% of the total unemployed.

In October, job growth gained the most traction in food and drinking places (+42,000), professional and business services (+37,000), retail trade (+27,000), health care (+25,000), manufacturing (+15,000), transportation and warehousing (+13,000), and construction (+12,000).

Temporary help services increased with 15,000 new jobs.

September 2014 Jobs Report

September Unemployment RateThe U.S. economy added 248,000 jobs in September while the unemployment rate decreased slightly to 5.9%, according to the Bureau of Labor Statistics' Employment Situation Summary. The unemployed rate dipped below 6% for the first time since the 2008 recession. The number of long-term unemployed persons was essentially unchanged at 3.0 million and accounted for 31.9% of the total unemployed.

In September, job growth gained the most traction in professional and business services (+81,000), retail trade (+35,000), and health care (+23,000). Employment in other major industries including manufacturing, transportation, and government changed little over the month. Temporary help services increased in September with 19,700 new jobs, up 0.7% over last month.

Wages were flat month-over-month and up 2% on a year-over-year basis. The average workweek for all employees edged up by 0.1 hour to 34.6 hours.

Paid Sick Leave Spreads in Time for Flu Season

A Woman Home without Paid Sick LeaveThe end of summer means the start of flu season. For many U.S. workers, catching a cold means either working through the sickness or giving up a paycheck. The Bureau of Labor Statistic estimates that about 40% of workers nationwide are not covered by a sick leave plan (U.S. Bureau of Labor Statistics, 08/13). These workers, usually part-time employees, must then choose between getting paid or getting well.

However, a string of recent legislation could be changing that. In 2011, Connecticut became the first state to mandate that all workers must have at least 5 days in paid sick leave available to them. The state estimated that the law benefited between 200,000 and 400,000 workers.

In April of last year, New York City became the largest city in the nation to require paid sick leave for workers, covering an estimated 1.2 million employees who were not previously able to take paid time off when they fell ill. The Big Apple followed in the footsteps of San Francisco, Seattle, and Portland, which had already passed mandatory sick laws. As of June 1, workers in Newark are also eligible to earn one hour of paid sick time for every 30 hours they work, allowing them to care for themselves or a sick family member if necessary. Similar laws have been passed in five other New Jersey cities, and a statewide law is making its way through the legislature. If passed, New Jersey would become the third state to pass a mandate for paid sick leave.

Parent with Sick ChildThe latest win for sick leave proponents occurred last week when Governor Jerry Brown of California passed the nation's second state-wide law requiring that all employers grant workers at least three days in paid sick time. Brown signed the law, stating that "Whether you're a dishwasher in San Diego or a store clerk in Oakland, this bill frees you of having to choose between your family's health and your job." Advocates claim it will benefit 6.5 million workers, many of whom work in the hospitality and service industry.

The spread of required sick time has driven 10 states, including Florida, Arizona, and Georgia to pass preemptive measures prohibiting cities and counties within the state from enacting sick leave ordinances. Opponents of the law are concerned that the cost of providing sick days will put too great a burden on small businesses and lower productivity from possible abuse of taking sick time off. A study from the Employment Policies Institute found that of the 86 Connecticut businesses affected by the law, 38 said they were less likely to hire in the future, 31 predicted they would cut benefits, and 12 said they would scale back employee hours (Employment Policies Institute, 02/13).

However, so far in Connecticut, fears of catastrophic costs and businesses closing or moving have not materialized. The Center for Economic Policy Research found that since Connecticut's law was passed, employment rose in key sectors affected by the law, including hospitality and health services (Center for Economic and Policy Research, 02/21/14).

These recent laws have spurred Massachusetts to put its own state-wide measure on the November ballot. If passed, the state would be the third to mandate sick leave for all employees, even part-time workers. And six others have paid sick leave on their legislative agendas for 2015, including Colorado, Vermont, and Maryland. These laws have only started to gain momentum within the last few years; it maybe several years more before it is determined if they are a benefit or a detriment.

Readers, do you think it should be mandatory for employers to give paid sick leave?

11/6/14 Update: On November 5, 2014, Massachusetts became the third state to pass a state-wide paid sick leave law. The state approved a ballot that requires all private sector employers with 11 or more employees to provide all workers with up to 40 hours of paid sick time per calendar year. The law applies to all employees, including part-time, seasonal, and temporary staff, and will go into effect July 1, 2015.

Should We Raise the Minimum Wage?

Minimum WageLast week, Americans enjoyed a three-day weekend in honor of the country's working class and their contributions to our nation. Many people fired up barbeques while President Obama tried to light a fire of support for raising the federal minimum wage, saying that "America deserves a raise."

The President's address came just a few days before Michigan's increased minimum wage took effect on September 1. Governor Rick Snyder signed legislation back in May that would raise the minimum wage to $9.25 an hour by 2018. Last week was the first in a number of gradual increases that raised the wage from $7.40 to $8.15 an hour. Michigan joins 13 other states that have raised wages in 2014, including California, Connecticut, Delaware, Maryland, Minnesota, and others. The minimum wage debate continues to sweep across other states and be both applauded as a measure that will expand the pillar of the middle class and criticized as economic folly that will eliminate jobs and actually hurt the low-wage workers it aims to help.

President Obama has pushed for a federal minimum wage increase from $7.25 to $10.10 an hour; however, Congress has shelved the initiative and it is unlikely that any legislation to raise the federal wage will be passed in the near future. But the heated debate still makes headlines as states and cities raise minimum wage requirements. In 2014, 38 states introduced some kind of minimum wage bill (National Conference of State Legislatures, 9/2/14).

Arguments advocating and condemning a higher federal wage all focus on one thing: the economy. Will employers cut jobs because of the higher cost of paying workers? Or will a higher wage mean increased spending and a boosted economy?

Industries Earning Minimum WageWhat will happen to jobs?

Earlier this year, the Congressional Budget Office (CBO) released a report that predicted that if the federal wage were raised to $10.10 an hour, the economy would lose 500,000 jobs (Congressional Budget Office, 02/2014). Opponents of this increase point to what happened in 2009, when the minimum wage was raised and the economy lost 600,000 jobs in the following six months - even while the economy was growing at 4%. When jobs are eliminated, low-skilled workers are more adversely affected, as their jobs are the ones lost and they have a harder time finding employment.

On the other hand, proponents of raising the wage argue that those states who introduced higher minimum wages in 2014 have actually added jobs at a faster growth rate than those who did not. The 13 states who boosted wages added jobs at 0.85%, while those states that did not raise their minimum wages grew at a rate of only 0.61%.

Will it help or hurt the economy?

Although the federal wage was raised in 2009, advocates of raising the wage again point out that inflation has eaten away at the previous bump's real value, which has slipped back to where it was in 1998. Additionally, a wage hike to $10.10 would lift workers out of poverty. The CBO predicts that 900,000 workers would be lifted above the poverty line and wages would be increased for 16.5 million workers. Other research forecasts even more positive expectations, estimating that 4.6 million people would be lifted out of poverty (Minimum Wages and the Distribution of Family Incomes," 12/2013). Critics are quick to point out that raising 900,000 out of poverty out of a total of 45 million does little solve the problem of poverty as a whole.

Furthermore, raising the wage will act as a stimulus and boost consumer spending, according to supporters. Opponents counter that any money used to increase wages must be passed on either to the business, resulting in lost jobs, or to the customer, resulting in higher prices. Additionally, there are no guarantees that an increase in wages would go directly into the economy or toward businesses.

Politicians, businesses, and other leaders have been drawn into the battle surrounding the minimum wage. Recently, Gap Inc.'s CEO Glenn Murphy decided to raise the wage for 65,000 of its workers to $10 an hour by June 2015. Murphy said that the move was not political or tied to any side of the debate but was motivated by Gap's commitment to "invest in front-line employees." Regardless of whether the company wanted to join the national discussion, they are now part of it; President Obama applauded the company and urged other businesses to use them as an example and work to raise wages for their employees in the absence of a higher federal wage.

Readers, do you think the federal minimum wage should be raised?

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