Walmart CEO on raising wages: “Bottom line – it’s working.”

Last week, when Walmart forecast slow sales growth for this year and a drop in profits for the next, Wall Street responded with the biggest one-day plunge in the company’s stock in 17 years.

“The reaction by the market – while not what we’d hoped – was not entirely surprising,” Walmart president & CEO Doug McMillon admitted in a blog post while recommitting to his plan to heavily invest in people and technology: “These investments are critical to our current and future success as a company. Simply put, it’s the right thing to do.”

And we will continue investing in our people.  Today we shared details around the $1.5 billion investment we will make next year to bring the wage for current associates to at least $10 in the U.S. The return from the initial investment of more than $1 billion we made earlier this year is encouraging. We have seen associate engagement and customer satisfaction scores increase dramatically over the past eight months and comp sales are increasing. Bottom line – it’s working.

During its decades-long climb to the top of the retail food chain, Walmart has made itself the poster child for a parasitic low-wage business model that leaves full-time wage earners reliant on government assistance just to scrape by. So if raising wages well above the current federal minimum of $7.25 can work for Walmart, it’s hard to argue it couldn’t work for the rest of the economy as well.