The news of wage hikes at some of the prominent retail stores like Wal-Mart Stores, Inc. (NYSE:WMT), Target, McDonald’s Corporation (NYSE:MCD) and few others have created a buzz around the corner. Reports claim that it’s a positive step taken by these companies, which will not only motivate employees to work effectively, but also help the economy to grow further.
Insights On The Matter:
The decision has come after a long wait of seven years, but seems like the increasing competition has left no other way in front of the retail market players. According to the analysts of Bank of America Merrill Lynch, the last few years have been very crucial for the industry. In total, the hospitality industry like restaurants, hotels, etc., and retail segment, especially online retail segment have offered maximum jobs and salary hikes over the last few years.
The unemployment rate has come down to 5.5% in the last few months as a result of the ongoing trend in the market. The current market situation has given the bargaining power to workers, even those will less skills. They can be selective towards their jobs and wages. Industry has not witnessed such freedom for last many years.
Even though the yearly growth rate is just over 2.1% in hospitality, retail and leisure sector, but the per hour rate has elevated by 0.3%, which is something that workers can cherish about. The hikes offered by Wal-Mart Stores, Inc. (NYSE:WMT) and McD can further strengthen the economy and increase the job hikes. Deutsche Bank reports that the unemployment rate of those people who have been away from work for six months or less is just 3.8%, a figure that was last seen in 2006-07. It gives a clear indication that no matter how many analysts talk about recession, the overall situation of job market has strengthened in the past few months.