An employee arranges gift boxes of beauty products for sale at a Wal-Mart Stores Inc. location. in Los Angeles, California.
Patrick T. Fallon | Bloomberg | beautiful pictures
Walmart said on Tuesday it was raising the minimum wage for store workers to $14 an hour, representing a roughly 17% increase for workers queuing and serving customers.
Starting in early March, store employees will earn between $14 and $19 an hour. According to Walmart spokeswoman Anne Hatfield, they currently make between $12 and $18 an hour.
With the move, the US retailer’s average hourly wage is expected to be $17.50 higher, Walmart US CEO John Furner said in an employee-wide memo on Wednesday. Three. That’s up from the $17 an hour average.
Hatfield said about 340,000 store employees will get a raise as a result of the move. That equates to a pay increase for about 21% of Walmart’s 1.6 million employees.
The retail giant, the country’s largest private employer, is raising wages at an interesting time. Weaker retail sales trends boosted companies, including Macy’s and Lululemon, recently to warn investors of a tougher year ahead. Some economists are calling for a recession amid persistent inflation and changing consumer habits.
Well-known technology companies, media institutions and banks, including Google, Amazon and Goldman bookyes lay off thousands of employees and set the alarm. However, the job market remains strong. Nonfarm Payroll Growth slowed down a bit in December, but was better than expected. And the number of Americans filing new claims for unemployment benefits decreased last week.
So far, retailers have largely avoided job cuts. Instead, they continue to grapple with a tight labor market. And they have a workforce that, like other Americans, is feeling uncomfortable from more expensive food, electricity and more.
Gregory Daco, chief economist at EY Parthenon, Ernst & Young’s global strategic consulting arm, said that compared to other industries, retail is more likely to leave than other industries – which allows people to leave. Employers manage their headcount by slowing down job filling. .
However, he said retailers can also plan cautiously. Over the past 18 months, they have had to work harder to recruit and retain workers. If they lose too many employees, he said, recruiting and training new employees can be expensive.
“Any retailer would have to think carefully and think twice about laying off a large portion of their workforce,” he said.
In a memo to Walmart employees, Furner said the raise will be part of many employees’ annual pay hikes. The company said some of those pay increases will also go to store employees working in parts of the country where the labor market is more competitive.
Walmart is also ramping up other perks to attract and retain employees. Furner says the company is adding more college degrees and certificates to its Live Better U program, including tuition and fees for part- and full-time workers. It is also creating more well-paying roles at its auto care centers and recruiting staff to become truck drivers, a job that can pay up to $110,000 in the first year. .
The pay increase brings Walmart’s average salary to the industry average, but still below some other major retailers, according to Just Capital, a partner with CNBC on annual ranking of America’s largest publicly traded companies on matters that reflect the priorities of the American public.
Target, Amazon and Best buy both raised their minimum wage to $15 an hour. However, Amazon and Target have been behind Walmart in launch their own debt-free college degree programs by 2021.