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 said Tuesday that it is raising its minimum wage for store employees to $14 an hour, representing a roughly 17% jump for the workers who stock shelves and cater to customers.
Starting in early March, store employees 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 retailer’s U.S. average wage is expected to be more than $17.50, Walmart U.S. CEO John Furner said in an employee-wide memo on Tuesday.
About 340,000 store employees will get a raise because of the move, Hatfield said. That amounts to a pay increase for roughly 21% of Walmart’s 1.6 million employees.
The retail giant, which is the country’s largest private employer, is hiking pay at an interesting moment. Some economists are calling for a recession. Prominent tech companies, media organizations and banks, including Google, Amazon and Goldman Sachs, have laid off thousands of employees and set off alarm bells. And weaker sales trends have prompted retailers, including Macy’s and Lululemon, to recently warn investors about a tougher year ahead.
But so far, retailers have largely avoided job cuts. Instead, they are still grappling with a tight labor market.
Retail, compared with other industries, tends to have higher churn than other industries — which allows employers to manage their headcount by slowing the backfilling of jobs said Gregory Daco, chief economist for EY Parthenon, the global strategy consulting arm of Ernst & Young.
Yet he said retailers may also be planning cautiously. For the past 18 months, they have had to work harder 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 share of their workforce,” he said.
In Walmart’s employee memo, Furner said the wage hike will be part of many employees’ annual increases. Some of those pay increases will also go toward store employees who work in parts of the country where the labor market is more competitive, the company said.
Walmart is sweetening other perks to attract and retain employees, too. Furner said the company is adding more college degrees and certificates to its Live Better U program, which covers tuition and fees for part- and full-time workers. It is also creating more high-paid roles at its auto care 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 back for updates.