The nation’s largest employer is announcing plans to increase its starting pay to nine-dollars an hour this spring, with plans to boost the rate another buck to ten-dollars an hour next year. Walmart has 67 stores in Iowa. The move by the retail giant will have a “significant” ripple effect on the markets across Iowa and nationwide, according to Creighton University economist Ernie Goss. “Their competitors like Target and Costco are going to have to raise wages and for one of their competitors, Sears, this may push them further into the economic abyss,” Goss says. “They’ve been in, I won’t say dire circumstances, but I will say not good over the last few years. It’s going to have a real ripple effect and I think a lot of that is going to be positive.”

Walmart is a 272-billion dollar corporation and Goss predicts the move to raise wages from the current seven-25 an hour will -not- have a big impact on its bottom line.  “Their profit margin is above Target right now, it’s above Costco, it’s higher than most of their competitors,” Goss says. “It’s going to ding them a little bit but I think in the end, they’re going to raise productivity or they’re going to have to reduce profits or they’re going to have to increase prices. I think it’s going to come in increased productivity. It’s going to push Target and Costco, two major competitors, to raise their minimum.”

Walmart’s first wage hike to nine-dollars an hour will come in April and Goss says it’ll be a beneficial move for consumers, the economy and for taxpayers.   “For example, the Earned Income Tax Credit for many of these Walmart workers, that’ll be reduced,” Goss says. “Of course, some food stamp programs other programs, that’ll now be reduced.”

A bill that would raise the state’s minimum wage to eight-75 an hour passed the Democrat-led Iowa Senate on Tuesday, though it is -not- likely to be approved by the Republican majority in the Iowa House.

(Radio Iowa)