Newspaper article The Christian Science Monitor

Wal-Mart Cuts Worker Hours: Why?

Newspaper article The Christian Science Monitor

Wal-Mart Cuts Worker Hours: Why?

Article excerpt

Wal-Mart giveth, and Wal-Mart taketh away.

In the midst of a $1 billion spending spree to increase workers' wages and offer more paths to promotion, the retail giant says it is reducing the number of hours some employees work in an effort to keep costs in check, Bloomberg reports.

The move comes after Wal-Mart reported a drop in second-quarter profits - due partly to rising labor costs following the company's April decision to raise its minimum wage to $9 an hour - and epitomizes the crux of the wage debate: Does a higher minimum wage result in fairer pay and better working conditions, or does it induce companies to take steps that negatively affect workers in order to control costs?

A similar question pops up almost every time a new labor standard is introduced. When the Affordable Care Act required firms with 50 or more employees to provide health coverage for those who work 30 hours a week or more, some analysts said the mandate - instead of helping provide healthcare for more workers - forced businesses to fire employees or cut worker hours to avoid paying the health costs.

"Instead of providing affordable health care coverage to employees, the law will effectively take hours and wages away from Americans who need and want full-time jobs," said Bruce Josten, executive vice president for government affairs at the US Chamber of Commerce, in a statement. "That's bad for businesses and their employees."

A parallel debate ensued in June after President Obama and the Labor Department unveiled a plan to extend overtime pay to 5 million additional salaried workers. As The Christian Science Monitor's Schuyler Velasco reported:

[The plan], while applauded by labor advocates, was coolly received by the country's business interests, who are warning that it could prompt employers to reduce hours and keep workers from advancing into salaried, managerial positions. But those in favor of the changes argue that the new rules will actually incentivize businesses to boost hiring while retaining their valuable salaried workers, at more reasonable hours.In the face of conflicting pressures from labor advocates and investors, Wal-Mart finds itself at the center of a similar discussion. …

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