An employee arranges gift boxes for beauty products displayed for sale at a Wal-Mart Stores Inc. location. in Los Angeles, California.
Patrick T. Fallon | Bloomberg | Getty Images
Walmart It said Tuesday it is raising the minimum wage for store clerks to $14 an hour, which represents a jump of about 17% for store clerks and customer service workers.
Beginning in early March, store employees will earn between $14 and $19 an hour. They currently earn between $12 and $18 an hour, said Anne Hatfield, a spokeswoman for Walmart.
With the move, the average American hourly wage is expected to rise to more than $17.50, Walmart US CEO John Furner said in a memo to all employees on Tuesday. That’s a raise from about $17 an hour.
About 340,000 store employees will get a raise as a result of the move, Hatfield said. That amounts to a pay raise for about 21% of Walmart’s 1.6 million workers.
The retail giant, which is the nation’s largest private employer, is raising wages at an interesting time. The trend of weak retail sales has caused the company, among others Macy’s SY Lululemon, to warn budding investors of a difficult year ahead. Some economists attribute the slowdown to inflation and changing consumer habits.
Well-known technology companies, media organizations and banks, among others Google, Amazon SY Goldman Sachs, laid off thousands of workers and set off alarm bells. However, the labor market remains strong. Private wage growth slowed slightly in December, but was better than expected. And the number of Americans filing new claims for unemployment benefits fell last week.
So far, distributors have avoided job cuts. Instead, they continue to struggle in a tight labor market.
Retail, compared to other industries, is growing more than other industries – where employers can manage their headcount by reducing the number of jobs, said Gregory Daco, head of economist at EY Parthenon, the global strategy consulting arm of Ernst & Young.
However, he said that traders may also prepare with caution. For the past 18 months, they have had to work hard to recruit and retain staff. If they lose employees, he said, hiring and training new employees can be expensive.
“All retailers have to think carefully and think twice about laying off a large portion of their workforce,” he said.
In a Walmart employee memo, Furner said the salary increase will be part of the annual raises for employees. Some of those wage increases will go to employees at stores working in areas with more competitive labor markets, the company said.
Walmart sweetens other benefits to attract and retain employees as well. Furner said the company is adding more degrees and certificates to the Live Better U program, which covers tuition and fees for part-time and full-time employees. It’s also creating higher-paying roles at car care centers and hiring truck drivers, jobs that can pay up to $110,000 in the first year.
Other retailers have been ahead of Walmart in employee wages. Targetfor example, announced in 2017 that it would gradually raise its minimum wage to $15 an hour by July 2020. The big-box competitor, which operates stores in cities with a higher cost of living, seems of New York City and San Francisco, has launched its debt-free degree program in 2021.