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TJX follows Walmart in revising minimum wage; trend expected to continue

The US economy’s labor market has seen a brisk hiring activity recent times; an instance that is also considered by many as the best labor market situation in the past 15 years. In such a dynamic labor market, employee churn could affect companies negatively through higher attrition rates. In a labor market, which many expect to be in short supply in the coming period, especially on the back of strong growth posted by the US economy in the past few quarters and significant consumer spending, firms increasingly see the practical utility of higher minimum wage rates.tj-maxx-store

Wal Mart’s move to increase minimum wage rates for 500,000 of its 1.3 million strong workforce from the federally mandated $7.25 an hour to $9 an hour is being perceived by many as an indication of the shortening labor market. The increase in the minimum wage payouts, which, according to Wal Mart will cost an additional $1 billion in 2015, may have been designed as a retention tactic to retain floor talent. However, any such retention strategy may get quickly nullified in view of TJX following suit. On Wednesday, TJX, parent company of the T.J. Maxx, Marshalls, and Home Goods chains of retail stores also declared a minimum wage rate that matched that of Wal Mart’s offering.

This could induce a domino effect in the retail sector when every other major retailer including Target and Home Depot may also incorporate a $9/hr wage rate policy. Aiha Nguyen, director of the grocery and retail project at the Los Angeles Alliance for a New Economy quipped that this trend is something that is expected to continue further in the sector. These wage revisions in the retail sector, although welcome and purportedly in favor of the working populace, are significantly lower than the $15 minimum wage provision demanded by living wage advocates.

Free market enthusiasts are piggybacking on these changes to harp on the point that market takes care of itself, even without any unnecessary government intrusions into private policy decisions. However, critics view these minuscule upward revisions as dilatory tactics intended to forestall the urgency of any upward revisions in the federally mandated wage rates.

This is a fear that has been put into perspective by Jody Knauss, a senior analyst at Wisconsin based Center for Media and Democracy, when he expressed concerns that a small and insignificant upward revision in minimum wage rates may just legitimize the $9/hr as the new standard, thereby strongly diluting the argumentative strength of $15 advocates.

About Sara Rose

She has spent the past 4 years playing the role of an IT consultant, and has now joined The Next Digit as a full time blogger. Her current profession is a result of her deep experience in computer gadgets, laptops, gaming accessories and other tech updates.


  1. Of course "the Market" takes care of itself. Look what a fine job it did helping America possess one of the largest wage gaps between the rich and the middle in the industrialized world. If there's one thing the Market takes care of, it's itself.

  2. LOL So everyone is happy, until all those price hikes kick in around mid-summer or fall from this move.

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