Walmart Wage Cut | Find Out How It Impacts You and the Global Markets

Pay cut in Walmart? Yes you heard it right, Walmart has decided to revise their salary structure and cut down on the wages for their new hires. This has caused a spark in US policy makers and Thinktanks have close eye on the developing situations and ripple effects.

We have conducted root cause analysis about Walmart’s wage cut move and discussed about its potential effects on US Economy and its ripple effects on Global Markets.

Summary

Walmart’s decision to cut wages for new employees could be the beginning of a downturn in the US economy.
The move is being closely monitored for signs of inflation and the effect on labour market .
US Economists have close eye on the situation.
Individuals should be cautious and start planning their finances wisely

Walmart Paycut / Walmart Wage Cut

Walmart have recently announced that they have significantly reduced the wages for new employees joining their organization. As per their official statements Walmart has decided to cut down wages for new hires who will be working to process online orders and stock management in warehouse (stock shelves) .

As Walmart is the largest employer in the United states, various industry exerts and economists have raised their serious concerns about this move from Walmart. For your context, Walmart is the largest employer in the US who is currently employing more then 1.6 Million employees throughout the states. Walmart’s actions are being closely monitored by US economists for signs of Inflation and some have even discussed about potential downturn in the economy might be caused due to such moves.

New Walmart recruits joining Walmart’s Digital and Stock team will be making around 1$ an hour lower then the one who was hired couple of months ago. Walmart’s move to update wage structure will have significant impact on labour market not only directly but also indirectly.

Direct effects can be seen in employees worsen wages and indirectly as wage update will be followed by other employers as well. This trend will give more power to employers due to this, economists and major US Think tanks expects worsen situations for more employees as Walmart can reduce wages of their existing employees as well, also their competitors and other employers may decide to follow the trend and reduce overall wages of their workers.

If situations get more serious, we can also expect more rounds of layoffs in the upcoming period.

Impact on US Population

With current situation when Interest rates are on all time high and expectation of reduction in disposal income of an individual, one has to plan his finances wisely and hold on his expenditure.

One has to starting cutting down on their current expenditure and utilize their dollars in paying their debts and liabilities as soon as possible and working on locating additional source of income and upskilling themselves which will currently help them to land in a better job with higher skill level or can be used to get new job if they get laid off in worse situation.

To sum it up, Walmart’s decision to reduce wages of their employees highlights the delicacy of the situation and exposes economic weakness,. To avoid such conditions individuals must not be reactive but must be proactive in nature and take steps to secure their and families financial future and survival,

Impact on Economy and Market

Walmart’s decision of starting wage cut of new employees will affect economy on a large scale, and the effects might not be quickly visible but it will surely play a role in shaping the US Economy.

As Walmart is the largest employer of USA with over 1.6 Million people working under the brand, any wage cut will directly reduce in hand salary and disposal income of the individual household.

This will directly result in lower than before demand for good and services by Walmart employees and they will start saving more and spending less which will directly affect earning of the goods and service provider. This effect on a large scale will result in overall decrease in revenue of the companies which will spark a larger fire in the profits of those companies.

More and more companies will then follow route of reducing wage structure of their employees and if the situation get worsen they might also decide to conduct multiple round of layoffs for survival of the organization.

This could result in a deeper recession than what is currently expected or can even cause depression scenarios in the US Economy and will spread to Global economy as well.

Impact on Inflation and Stock market

Due to wage cut, overall disposal income in hands of individual will see a dip and individuals will therefore demand for lower goods and services. This will indirectly fore companies to reduce their margin and reduce the prices of their goods and services making them cheaper and individuals can afford to buy,

This initially sounds like a positive news as Inflation rate can be seen going lower then expected and we can witness a short rally in US Stock market, but as per experts such rally is not sustain longer as overall demand for goods and services can be seen going down with time and market matures.

Overall, the Economical outlook for the year 2024 is determined as uncertain and is highly depended on the upcoming move by the Federal reserve.