Walmart raises minimum wage as retail labor market remains tight
An employee arranges beauty product gift boxes on display for sale at a Wal-Mart Stores Inc. location. in Los Angeles, California.
Patrick T. Fallon | Bloomberg | Getty Images
Walmart Tuesday that they are increasing the minimum wage for store workers to $14 an hour, representing a jump of about 17% for the workers who stock shelves and serve customers.
Starting in early March, store workers will make between $14 and $19 an hour. They currently earn between $12 and $18 an hour, according to Walmart spokeswoman Anne Hatfield.
With the move, the average U.S. salesperson’s salary is expected to top $17.50, Walmart U.S. CEO John Furner said in an employee-wide memo Tuesday.
About 340,000 store employees will get raises as a result of the move, Hatfield said. That means a pay increase for about 21% of Walmart’s 1.6 million workers.
The retail giant, the country’s largest private employer, is raising pay at an interesting time. Some economists call for a recession. Well-known tech companies, media organizations and banks, incl Google, Amazon and Goldman Sachs, has laid off thousands of workers and set off alarm bells. And weaker sales trends have encouraged retailers, among them Macy’s at and Lululemonto warn investors recently of a tougher year ahead.
But so far, retailers have largely avoided job cuts. Instead, they continue to engage in a tight labor market.
Retail, compared to other industries, has a higher churn rate than other industries — which allows employers to manage headcount by slowing job turnover, said Gregory Daco, chief economist for EY Parthenon, a strategy consulting arm. global Ernst & Young.
But he said retailers may also be planning carefully. For the past 18 months, they have had to work harder to recruit and retain staff. If they lose too many employees, he said, hiring and training new employees can be costly.
“Any retailer needs to think carefully and think twice about laying off a good portion of their workforce,” he said.
In a memo to Walmart employees, Furner said the wage increase would be part of many workers’ 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 sweetening other benefits to attract and retain employees as well. Furner said the company is adding more college degrees and certifications to its Live Better U program, which covers tuition and fees for part-time and full-time employees. It is also creating more high-paying jobs at its auto care centers and hiring workers to become truck drivers, a job that can pay up to $110,000 in the first year.
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