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&lt;p&gt;Wal-Mart is raising pay for the majority of its hourly-wage employees, according to a recent article in the Wall Street Journal. Great news for those people but hardly of much interest to the rest of us, right?&lt;/p&gt;&lt;p&gt;But maybe it should be.&lt;/p&gt;&lt;p&gt;According to the &lt;a href=&quot;http://www.wsj.com/articles/wal-mart-to-increase-wages-for-most-u-s-store-workers-1453315937&quot; target=&quot;_blank&quot;&gt;Journal article&lt;/a&gt;, the move will affect close to 1.2 &lt;em&gt;million&lt;/em&gt; employees of Wal-Mart and Sam&#39;s Club stores.&lt;/p&gt;&lt;p&gt;Want some context on that number? Try this: if Wal-Mart built a city just for its hourly employees, it would be the 10&lt;sup&gt;th&lt;/sup&gt;-largest city in the US by population, right behind Dallas (which has the gall to include people who don&#39;t work at Wal-Mart—like children—in its census).&lt;/p&gt;&lt;p&gt;Want more context? Sure: Wal-Mart&#39;s hourly employees make up approximately one-half of a percent of the entire US working-age population. When you add in salaried employees, the company directly employs more people than all of the branches of the US Armed Forces, combined.&lt;/p&gt;&lt;p&gt;Like it or not, then, Wal-Mart is a big deal in the American employment landscape, and when it makes a move, we should all be paying attention.&lt;/p&gt;&lt;p&gt;Here&#39;s why this latest announcement is a big deal:&lt;/p&gt;&lt;p&gt;&lt;strong&gt;It Proves the Labor Market is Tightening&lt;/strong&gt;&lt;/p&gt;&lt;p&gt;Remember all those &quot;Fight for $15&quot; campaigns that have been springing up across the country, in an effort to get the minimum wage closer to a level that it&#39;s actually possible to live on? It&#39;s entirely possible that they&#39;ve hit home, and that this raise is proof that huge corporations will listen to people, if only they raise their voices loud enough.&lt;/p&gt;&lt;p&gt;A more likely explanation, however, is the fact that we&#39;re not in an employer&#39;s economy anymore: the unemployment rate stands at just 5 percent nationally, and the number of &lt;a href=&quot;http://www.bls.gov/news.release/jolts.t04.htm&quot; target=&quot;_blank&quot;&gt;people voluntarily leaving jobs&lt;/a&gt; has been edging higher in many sectors. That kind of picture tends to translate to high employee turnover for companies that aren&#39;t doing enough to keep their workers satisfied—a fact borne out by the &lt;em&gt;Journal&lt;/em&gt; piece, which reports that the firm suffers some half a million employee losses every year. That&#39;s a lot of money in recruitment and training costs—some of which will surely offset the additional outlay on wages.&lt;/p&gt;&lt;p&gt;&lt;strong&gt;It Means Other Companies Will Follow Suit&lt;/strong&gt;&lt;/p&gt;&lt;p&gt;For the same reason, Wal-Mart&#39;s competitors—including fellow national big box outfits such as Target and Sears, as well as local/regional grocery chains—will be forced to follow suit if they want to be able to attract and retain their own employees. And the knock-on effects are likely to be felt far beyond that sector: fast food workers, for example, have recently been campaigning for wage increases that are more likely to arrive in the aftermath of this kind of announcement.&lt;/p&gt;&lt;p&gt;&lt;strong&gt;It Could Reduce Government Spending&lt;/strong&gt;&lt;/p&gt;&lt;p&gt;The last time Wal-Mart made headlines for its wages, it was &lt;a href=&quot;http://www.slate.com/articles/business/moneybox/2014/04/walmart_employees_on_food_stamps_their_wages_aren_t_enough_to_get_by.html&quot; target=&quot;_blank&quot;&gt;in relation to food stamps&lt;/a&gt;: the company&#39;s starting wage for many employees was low enough in many states that its employees qualified for government assistance with their grocery bills. While it won&#39;t eliminate that problem entirely, this raise &lt;em&gt;does &lt;/em&gt;have the potential to lift the incomes of many Wal-Mart employees above the food stamp threshold, cutting government costs in the process. Sure, that&#39;s not the most overwhelmingly positive sentence ever written, but it represents a step in the right direction for the time being. &#160;&lt;/p&gt;&lt;p&gt;&lt;strong&gt;It Could Also Have a Down Side&lt;/strong&gt;&lt;/p&gt;&lt;p&gt;It would be remiss not to point out that higher wages could well be used as a justification for raising prices on products, or for cost-cutting efforts elsewhere. Wal-Mart estimates that the price of its 2% increase would be in the region of $2.7 billion by the end of fiscal 2017—a hit to the bottom line that management and investors are sure to want to see a replacement for somewhere. Which means that the key—at least for the company&#39;s own employees, will be if the wage increases can stay ahead of any inflation.&lt;/p&gt;&lt;p&gt;The old saw about the US economy used to say that &quot;As goes General Motors, so goes the nation.&quot; Given the size and influence of the company that Sam Walton founded, perhaps it&#39;s time for an update.&#160;&lt;/p&gt;

Raises at Wal-Mart: Why You Should Pay Attention

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