When low-wage workers at U.S. Walmart stores get a raise in April to at least $9 an hour, it will put significant pressure on rivals like Target, according to Moody’s Analytics capital markets economist Ben Garber. Garber says Target especially will feel the heat to keep up with Walmart, but even fast-food chains like McDonald’s will be pressured as well. Walmart’s decision is evidence that the labor market is tightening and people are demanding higher wages, Garber says. Not only will this increase be significant to Walmart employees, but it’s a positive for the broader economy, according to Garber, who explains that rising wages lifts demand and keeps growth moving in the right direction.
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