In a recent article, Wal-Mart Executive stated that over 475,000 employees get paid over $25,000 as a means to show that they are well-paid employees. However, this created an outburst with the rest of the employees as they currently employ 1.4 Million people meaning that the others get paid less than this amount. Last week a large protest outside Wal-Mart arrested 50 people. Currently the Wal-Mart employees as well as the employees at Target are threatening to walk out on Black Friday.
This article shows the importance of keeping the workers happy and how important a good image for the company is. Therefore, when companies try to exploit low cost labour to save on overall expenses it may cost them a lot more in the end, with having to increase salaries and manage the reputation interpreted by the customers. Furthermore, another study showed that Wal-Mart can financial afford paying their customers a 50% increase in Salary as the CEO of Wal-Mart netted a staggering $23.2 million in 2012 and the gross profit is in the billions. Overall, an increase in pay may be what Wal-Mart need to do to save costs in the long-run.
Financial Information: http://finance.fortune.cnn.com/2013/11/12/wal-mart-pay-raise/?iid=HP_River