By Elly Cosgrove
Walmart’s decision to give its minimum wage workers a $1-an-hour raise could boost their spending—and help the local economy, says a local business development official.
“As one of the top ten largest employers in Rockbridge County, it is encouraging to see the company invest more in its employees, especially since higher wages are a contributing factor to a higher quality of life,” Rockbridge County Business Development Assistant Brandy Flint said.
“Basically, it gives somebody the opportunity to make a little more money each year, which in turn gives them more spending capability,” she said.
Lexington Walmart Supercenter, located on North Lee Highway, employs about 250 workers from Lexington, Buena Vista, Rockbridge County and Augusta County, Flint said. About 150 of them are part-time workers and 100 are full-time employees.
The $1-an-hour boost will increase full-time minimum wage workers’ annual income by approximately $2,080.
Walmart President and CEO Doug McMillon attributed the better wages to the recent tax reform bill that President Donald Trump signed on Dec. 22.
“We are early in the stages of assessing the opportunities tax reform creates for us to invest in our customers and associates and to further strengthen our business, all of which should benefit our shareholders,” McMillon said in a news release. “Tax reform gives us the opportunity to be more competitive globally and to accelerate plans for the U.S.”
Jack Bovay, a Washington and Lee University professor, licensed CPA and tax lawyer, said big business in the U.S. is already seeing short-term benefits from the tax reform legislation and “people will start seeing more money in their paychecks real soon.”
Other large companies, such as Apple, FedEx and AT&T, have also announced pay raises or bonuses in the wake of the tax reform bill.
“At a real simplistic level, their corporate tax rate, the rate of tax they pay on their profits, is decreasing from 35 percent to 21 percent,” Bovay said.
The decrease in the corporate tax rate will generate an extra $140,000 for every $1 million of profit, “and that’s real money now,” he said.
But the increases fall short locally.
The retail or wholesale industry average weekly pay for Rockbridge County, Lexington and Buena Vista is $467, Flint said. Even with Walmart’s wage increase, the store’s minimum-wage, full-time workers are still earning $27 below the area’s average.
Flint said households that rely solely on this minimum wage income would fall within Rockbridge County’s poverty rate of 13.9 percent.
Officials at the Lexington Walmart failed to respond to requests for interviews.