An employee arranges gift boxes of beauty products displayed for sale at a Wal-Mart Stores Inc. store in Los Angeles, California.
Patrick T. Fallon | Bloomberg | Getty Images
walmart said Tuesday it was raising its minimum wage for store workers to $14 an hour, a jump of about 17% for workers who stock shelves and attend to customers.
Starting in early March, store workers will earn 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 retailer’s average U.S. salary is expected to be over $17.50, Walmart U.S. CEO John Furner said in an employee-wide memo on Tuesday.
About 340,000 store workers will receive a raise due to the move, Hatfield said. That equates to a pay raise for about 21% of Walmart’s 1.6 million employees.
The retail giant, which is the nation’s largest private employer, is raising wages at an interesting time. Some economists are calling for a recession. Leading tech companies, media and banks, including Google, Amazon and Goldman Sachs, laid off thousands of employees and set off alarm bells. And the weaker sales trends prompted retailers, including Macy’s and lululemonto recently warn investors of a tougher year ahead.
But so far, retailers have largely avoided job cuts. Instead, they are still struggling with a tight labor market.
Retail, compared to other industries, tends to have a higher churn rate than other industries — allowing employers to manage their workforces by slowing job replacement, said economist Gregory Daco chief for EY Parthenon, the global strategy consulting arm of Ernst & Young.
Still, he said retailers could also plan cautiously. Over the past 18 months, they have had to redouble their efforts to recruit and retain workers. If they lose too many employees, he said, hiring and training new employees can be costly.
“Any retailer is going to have to think carefully and think twice about laying off a good chunk of their workforce,” he said.
In the memo from Walmart employees, Furner said the salary hike would 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 job market is more competitive, the company said.
Walmart is also sweetening other perks to attract and retain employees. Furner said the company is adding more college degrees and certificates to its Live Better U program, which covers tuition and fees for part-time and full-time workers. It is also creating more high-paying positions at its auto service centers and recruiting employees to become truck drivers, a job that can pay up to $110,000 in the first year.
This story is developing. Please check for updates.