April is here which means thousands of Walmart workers are about to get a raise.
Earlier this year, the retailing giant announced it would pay its hourly employees a minimum of $9 per hour starting this month and plans to up the minimum to $10 per hour in 2016 for all workers who complete a six-month training period.
Walmart received a ton of positive attention for its announcement, including from President Obama who called CEO Doug McMillon from Air Force One to commend him for the act, which other chains such as Target have copied.
But not everyone is satisfied with Walmart's actions when it comes to wages.
"It's certainly a good thing to up people's pay, there's no question about it [but] this company has a long way to go to provide a livable wage," says Frank Clemente, executive director at Americans for Tax Fairness, a non-profit group that supports progressive tax reform.
Walmart spokesman Kory Lundberg told Yahoo Finance that Walmart is "proud to have some of the highest starting salaries in retail,"adding it was "hard to comment" on the ATF report as he hadn't had a chance to review. (The report was embargoed until Wednesday 12:01 a.m. ET)
Lundberg did say Walmart has employees with a full scope of lifestyles, from high school students to retirees, suggesting it was unfair to focus on a specific profile as representative.
In addition to higher wages, he noted Walmart is also investing in "scheduling and training" for workers to give them "more control" over their hours. The goal is to provide employees "the skills and training to move up at Walmart or somewhere else and get a job beyond entry level," Lundberg said.
Last year, Americans for Tax Fairness (ATF) generated some headlines with a report entitled Walmart: How Taxpayers Subsidize America's Biggest Employer and Richest Family. In response to Walmart's new wage policy, ATF produced a new study released April 1 that concludes "Walmart needs to provide a livable wage of at least $15 and hour in order to stop shifting the cost of its low wages to other taxpayers."
Walmart receives about $6.2 billion in annual tax breaks and tax subsidies because the retailer "pays its employees so little that many of them rely on food stamps, health care and other taxpayer-funded programs," according to AFT. And with approximately 12% of food stamps being used at Walmart, the company is further critiqued for "double dipping" on the American taxpayer.
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Even at $10 per hour, AFT estimates a full-time Walmart worker would only earn $17,680 per year and -- assuming no other household income for a family of two or more -- would remain eligible for eight public assistance programs, including the Supplemental Nutrition Assistance Program (aka food stamps), Section 8 Housing, the Earned Income Tax Credit and National School Lunch Program.
At $15 per hour, the same Walmart worker would earn $31,200 per year and then only be eligible for the Earned Income Tax Credit.
"It's a low-wage industry and it doesn't need to be," Clemente says of retail. "If [Walmart] were to raise their wages -- they'd have to raise prices a small amount in order to raise wages -- those wages would then become livable at $15 per hour and people would have a much greater ability to survive on their own."
Of course, it's quite possible Walmart would have to raise prices a lot to offset the cost of another (and big) pay hike for hourly employees, hurting consumers, and/or employ a lot fewer Americans than the 1.3 million currently working for the company.
So what does Clemente think is a "fair" tradeoff between higher wages vs. higher prices at the store or fewer jobs at Walmart? Watch the accompanying video to find out.
Aaron Task is Editor-at-Large of Yahoo Finance. You can follow him on Twitter at @aarontask or email him at altask@yahoo.com.
