Home Economy Walmart is raising starting wages for store workers

Walmart is raising starting wages for store workers

by SuperiorInvest

Walmart, the nation’s largest private employer, is significantly increasing its starting wages for store employees as it struggles to recruit and retain workers in a tight retail labor market.

On Tuesday, the retail giant said in a memo to employees that it was raising its minimum wage for store workers to $14 to $19 an hour, from $12 to $18 an hour.

In a memo, Walmart’s U.S. operations chief John Furner said the raises were meant “to provide attractive pay in the markets we operate in.” The move would immediately affect about 340,000 of the company’s 1.3 million front-line hourly workers at stores across the United States.

For years, Walmart has been under pressure from unions, politicians and activists to raise wages for workers in its stores. The increase announced Tuesday will raise the average wage at Walmart stores to about $17.50 an hour from about $17, though the company’s average wage still lags behind some competitors such as Costco.

“We want to make sure we’re attracting the best associates,” Walmart spokeswoman Anne Hatfield said in an interview.

The increase, which will take effect in March, comes at a time of persistently high inflation, which has been particularly difficult to navigate for low-wage workers whose paychecks are stretched by the cost of food, fuel and other basic necessities.

Walmart’s move is also an oddly optimistic sign about the broader economy: One of the nation’s largest companies is taking steps to keep employees even as other major employers announce layoffs.

Mark Zandi, chief economist at Moody’s Analytics, said he was surprised Walmart raised wages “so significantly” given the risks of a recession.

“It indicates that Walmart does not think the economy will experience a recession anytime soon, or that if it does, it will be a short-term and mild downturn,” Mr. Zandi said in an email.

The move may also reflect long-term challenges retailers face in retaining workers as baby boomers age out of the workforce and the labor pool shrinks, he said.

While the increase will ease inflationary pressure on Walmart workers, it may inadvertently prolong the problem in general by raising wages in other sectors of the economy.

“Walmart’s move to raise the minimum wage may also complicate the Fed’s efforts to curb wage pressures and thus inflation,” Mr. Zandi said, “because the decision may have an impact on increasing wages and prices in other labor-intensive industries such as health care, hospitality and personal services that the Fed is targeting in its fight against inflation.

Source Link

Related Posts

%d bloggers like this: