Novstrup’s Youth Minimum Wage 25% Below Starting Wage at Aberdeen Walmart

Just in case Aberdeen students decide all that A-TEC training in auto mechanics, CNC, and med tech isn’t their bowl of gravy, Walmart is starting cashiers at $10 an hour and overnight stockers at $11.50:

Walmart hiring ad, Aberdeen American News, 2015.09.01, p. 2D.
Walmart hiring ad, Aberdeen American News, 2015.09.01, p. 2D2

If Walmart is saying that cashiers and a.m. stockers should get a minimum wage of $10 an hour, can we reasonably argue that every other worker deserves at least $10 an hour? And with pay like that at Walmart, is it possible that no young worker would have been affected by Senator David Novstrup’s politically motivated youth minimum wage cut to $7.50 an hour?

For perspective, if the statutory annual cost-of-living adjustment to South Dakota’s minimum wage (currently $8.50 an hour) hangs around the past-decade historical average of 2.4%, it will not break $10 until 2022.


8 Responses to Novstrup’s Youth Minimum Wage 25% Below Starting Wage at Aberdeen Walmart

  1. IMHO If person ‘A’ does a job for me I will pay them X
    If person ‘B’ does the job I will pay them the same.
    Their age, social status, sex, color, height, weight, or anything else doesn’t matter. What does matter is the job I have requested gets done in the time frame I requested.

    Employers would do well to ignore this law and pay all their workers based on the job they are doing, and not on the worker’s status.

  2. Fortunately, MC, thanks to our petitioning efforts, they all get to ignore the youth minimum wage until at least November 2016. I agree that paying a lower wage based on age, sex, or any other personal status is discriminatory and against the spirit of the free market, which says wages should reflect the work done, not some subjective assessment of the person doing the work. If appointed to Rev. Hickey’s District 9 House seat, will you help bring that message to Pierre?

  3. Don Coyote

    Of course the inevitable flipside to Walmart’s increase in it’s in house starting wage is a corresponding reduction in total hours being scheduled to make up for the increase of $1B of extra expenses. This is a textbook example of the effects of supply and demand. Raise the price of something and you’ll have less demand. Color me shocked!

    “Raise the wages in order to get more productive staff and the very point and purpose of what you’re doing is to reduce the number of labor hours you must purchase.

    That Walmart is offering fewer hours as a result of the raise in wages isn’t some oddity, some unexpected glitch. It’s the very point of the wage rise in the first place.

    And this is something that’s worth remembering over the discussions of a higher minimum wage. That public policy is being argued for on the grounds that companies will respond by working to increase the productivity of labor. Yep, they will: which means, as above, that they will employ less labor as a result.”

    http://www.forbes.com/sites/timworstall/2015/09/01/of-course-walmart-cut-hours-after-raising-pay-what-did-anyone-expect/

  4. Novstrup doesn’t care what Wal Mart is paying. Wal Mart can’t hire every kid, and not every kid wants to work at Wal Mart. Novstrup’s concern is being able to pay less to the youths who work at Thunder Road Family Fun Centers.

  5. mike from iowa

    Raise the minimum wage and employment goes up. Kind of shoots your supply and demand idea in the butt,DC.

  6. Supply and demand: well, Walmart is raising the price of its own labor… so what’s your point, “Don”?

    Walmart has been squeezing workers for more productivity at less cost for a long time. Apparently they think they can make more money by increasing the hourly wage while working employees for fewer hours. The Forbes contributor (i.e., another blogger, equivalent in authority to this blog) you cite offers no data on whether the wage increase and hour cuts result in a net increase or decrease in take-home pay. It’s just more clanging the theory pot without reference to empirical data on impacts of minimum-wage increases.

    Rather than reinforcing “Don”‘s ideological prejudices, I’d suggest that the real news here is that even a notorious enemy of labor like Walmart recognizes that attracting and keeping talent for even the lowest tier of jobs (and does anyone dispute my assertion that we may reasonably view Walmart jobs as entry-level, minimum-wage work?) requires more than $7.25 or $8.50 an hour. Walmart’s decision signals that the market—the collective wisdom of millions of workers, regular folks, whom “Don”‘s ideology cannot dismiss as incorrect nitwits—says our current minimum wage is too low and that President Obama is right to call for setting the minimum wage higher ($10.10, remember?).

    Remember, Rohr, the Novstrups already have an exemption to the minimum wage under the seasonal worker statute passed in 2011, with David’s vote.

  7. Deb Geelsdottir

    MalWart* has raised its nationwide minimum starting wage to $9, mostly as a response to social and political pressure. They want to look a little less exploitive of their human resources. Apparently sufficient labor is hard to come by in Aberdeen so the sellers of cheap, plastic crap* are forced to pay a little more.

    *Nope, I don’t like the Walton family or any of their businesses.

  8. The Bloomberg article mentioned by Don’s blogger includes the following passages:

    The reduction in hours is taking place only in locations where managers have overscheduled workers, staffing the store for more time than they’ve been alloted, said Kory Lundberg, a spokesman for Bentonville, Arkansas-based Wal-Mart. The reductions won’t affect efforts to better staff stores, shorten checkout lines, and improve cleanliness and stocking, he said.

    …The staff at a location in Fort Worth, Texas, were told that the store needed to cut 1,500 hours, according to a worker who asked not to be named for fear of being reprimanded. After being asked to stay late to help with extra work earlier in the week, some were told to take two-hour lunch breaks to make up for the additional hours they’d clocked, the employee said [Shannon Pettypiece, “Walmart Cuts Some Workers’ Hours After Pay Raise Boosts Costs,” Bloomberg, 2015.08.31].

    I know that’s just Walmart saying so, but Walmart is cutting back excess hours, not reducing normal hours. That doesn’t change the basic economic point that higher wages may mean fewer hours, but it does indicate that paying the higher wage is not causing corporate to change its general plan for staffing.

    But Walmart could shoot itself in the foot by cutting hours:

    By cutting hours, Wal-Mart now risks losing some of its best employees to competitors that can provide more stable schedules, said Burt Flickinger, managing director at Strategic Resource Group LLC. The company also may alienate customers if the staffing levels result in poorer customer service and products not getting on store shelves, he said.

    Wal-Mart has made strides during the past year in addressing customers’ complaints of barren shelves, dirty stores and long check-out lines, Flickinger said. But some locations still aren’t staffed well enough during peak times, he said.

    “Wal-Mart risks a talent drain at a time when McMillon has made meaningful improvements in the company,” Flickinger said. “All these competitors will take Wal-Mart workers to make themselves strong and help make a major competitor weaker” [Pettypiece, 2015.08.31].

    TANSTAAFL, Don. If Walmart (and all other South Dakota employers) want productive, long-term employees, they’ll have to pay them what they are worth and offer them the stable hours they need to support their households. It sounds to me as if they can’t afford to balance their wage increases by cutting hours; they’ll just have to eat most of the cost of paying their Aberdeen crew at least $10 an hour.