An employee arranges beauty product gift boxes displayed for sale at a Wal-Mart Stores Inc. location in Los Angeles, California.
Patrick T. Fallon Bloomberg | Getty Images
Walmart On Tuesday it said it was raising its minimum wage for store employees to $14 an hour, a nearly 17% jump for workers who stock shelves and fill customers.
Beginning in March, store workers will earn between $14 and $19 an hour. They currently earn between $12 and $18 an hour, according to Walmart spokeswoman Ann Hatfield.
With the move, the retailer’s U.S. average hourly wage is expected to rise to more than $17.50, Walmart U.S. CEO John Furner said in an employee-wide memo Tuesday. That’s an increase from an average of $17 an hour.
The move will add about 340,000 store employees, Hatfield said. That amounts to a pay increase of about 21% of Walmart’s 1.6 million employees.
The retail giant, which is the country’s largest private employer, is giving pay raises at an interesting time. Weak retail sales trends prompted companies, including Messi’s And Lululemon, recently warned investors of a tough year ahead. Some economists are calling for a recession amid persistent inflation and changing consumer habits.
Including prominent technology companies, media organizations and banks Google, the amazon And Goldman Sachs, laid off thousands of employees and raised alarm bells. Still, the job market remains stable. Nonfarm payrolls growth slowed slightly in December, but was better than expected. And the number of Americans filing new claims for unemployment benefits fell last week.
So far, retailers have largely avoided job cuts. Instead, they continue to struggle with a tight labor market.
Retail, compared to other industries, tends to have higher churn rates — which allows employers to manage their head count by slowing job backfilling, said Gregory Dako, chief economist at EY Parthenon, Ernst & Young’s global strategy consulting arm.
Yet he says retailers can also plan carefully. Over the past 18 months, they have had to work hard to recruit and retain staff. If they lose many employees, he said, hiring and training new employees can be expensive.
“Any retailer should think carefully and think twice about laying off a good portion of their workforce,” he said.
In Walmart’s employee memo, Ferner said the wage increase will be part of many employees’ annual raises. Some of those pay increases will also go to store employees who work in parts of the country where the labor market is more competitive, the company said.
Walmart is also sweetening other perks to attract and retain workers. Ferner said the company is adding more college degrees and certificates to its Live Better You program, which covers tuition and fees for part- and full-time employees. It is creating more high-paying roles at its auto care centers and hiring employees to become truck drivers, a job that can pay up to $110,000 in the first year.
Other retailers are a step ahead of Walmart when it comes to employee pay. the targetFor example, it announced in 2017 that it would gradually raise its minimum wage to $15 an hour in July 2020. The rival big-box player, which operates stores in cities with high costs of living such as New York City and San Francisco, launched its own debt-free college degree program in 2021.