LAWRENCE —The voluntary moves recently by major retailers to increase their minimum wages for workers will heighten and not settle a debate about increasing the national minimum wage, according to a University of Kansas researcher who studies philosophy and policy.
The parent company of retailers T.J. Maxx, Marshalls and HomeGoods this week followed suit from Wal-Mart Stores Inc. about raising its minimum hourly wage for workers. Both companies plan to boost pay for all of their U.S. workers to at least $10 per hour by next year. According to news reports, economists have indicated the moves are a sign of wage growth recovering finally after the Great Recession.
Ben Eggleston, associate professor of philosophy, recently edited The Cambridge Companion to Utilitarianism, and he discusses the retailers’ wage decisions in the context of using utilitarianism, the theory based on the maximization of overall well-being, for large-scale policy decisions.
Q: What is behind the recent retailers’ wage decisions?
Eggleston: The decisions of Wal-Mart and T.J. Maxx are almost certainly a story of economics rather than altruistic concern for workers. The labor market has gotten tighter, and it’s bad PR to be seen as a low-wage employer, so strategically it made sense for these companies to bump up their minimums and be public about doing so.
Q: Are these announcements still positive, though?
Eggleston: Part of what’s good about these decisions is that wages will go up for those companies’ employees. But a bigger part of what’s good about these decisions is that they reflect the way lower U.S. unemployment is finally translating into higher wages. If it’s happening at those two companies, it’s almost certainly happening at many other companies, even if those other companies are not making policy changes that lend themselves to public announcements.
On the other hand, even though wages seem to be rising now, that doesn’t mean they’re rising fast, and low-wage employees are still feeling the effects of years of extreme stagnation at the low end of the wage scale.
Q: What do these decisions mean in relation to the federal minimum-wage debate?
Eggleston: Both sides of the minimum-wage debate can try to score points with this latest news. Advocates of a higher minimum wage can say that a legislative increase won’t be very burdensome, because wages are creeping up toward proposed new minimums anyway. Critics can say that a legislative increase is unnecessary, because companies voluntarily enact their own increases when it is economically feasible for them to make those larger investments in their workforces.
Q: What are the ethical arguments behind the minimum-wage debate?
Eggleston: Advocates of raising the national minimum wage say that doing so will relieve some of the tremendous financial pressures that low-wage workers will face. Opponents say raising the national minimum wage threatens to raise unemployment by forcing some employers to lay off some workers in order to pay for the higher wages it has to pay to all its remaining employers.