Walmart's wage hike would be smart even without tax cuts

Marcus Newton
January 12, 2018

Walmart, the world's largest private employer, is boosting its starting salary for US workers to $11 an hour, giving a one-time cash bonus of up to $1,000 to eligible employees and expanding its maternity and parental leave benefits.

Wal-Mart said the changes will benefit the retailer's more than one million hourly employees across the country and will take place in February. The company is also expanding its maternity and parental leave policy and adding an adoption benefit.

The nation's unemployment rate has also plummeted to 4.1 percent from 5.7 percent since Wal-Mart's first announcement of higher wages in 2015, creating a battle to recruit and retain cashiers and shelf stockers.

Wal-Mart employs about 2.2 million people globally, with more than 1.5 million in the U.S. and had total global revenue of almost $500 billion previous year.

Since Wal-Mart's initial increase starting in 2015, many states have enacted minimum-wage laws, meaning that a "sizable group" of its 4,700 USA stores already pay $11 an hour, according to spokesman Kory Lundberg.

In assessing potential additional investments made possible by the new tax reform law, Walmart will consider the needs and expectations of associates, customers and shareholders while working within its financial framework of strong, efficient growth; consistent operating discipline; and strategic capital allocation. A discrete one-time charge will be taken in the fourth quarter of the current year to account for the bonus; qualification will be determined before the end of the month and payments will be paid as quickly as practical thereafter. The amount of the bonus will be based on length of service.

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The wage increase announced Thursday by Walmart benefits all hourly USA workers within its stores, Sam's Clubs, eCommerce, logistics and home office.

The one-time bonuses will range from $200 to $1,000, depending on how long workers have been with Wal-Mart.

With this move, the world's largest private employer has scored big points with Republican politicians, who now have a talking point for the campaign trail, and maybe also from shoppers who see its wage increase as socially responsible.

The hike will also increase the average hourly pay at Wal-Mart for full-time employees to $14.50 from a current $13.85. The change is in addition to wage increases already planned for many USA markets in the coming fiscal year. That irks some economists, who say the federal level has failed to keep up with inflation and productivity.

Twelve states already have minimum wages of at least $10, according to the Economic Policy Institute.

Other reports by MaliBehiribAe

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