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 said Tuesday that it is raising the minimum wage for store employees to $14 an hour, representing a roughly 17% jump for the workers who stock shelves and serve customers.
Starting in early March, store employees 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 U.S. average wage is expected to be more than $17.50, Walmart U.S. CEO John Furner said in a memo to all employees Tuesday.
About 340,000 store employees will get a raise because of the move, Hatfield said. That amounts to a pay increase for about 21% of Walmart’s 1.6 million employees.
The retail giant, which is the country’s largest private employer, is raising wages at an interesting moment. Some economists are calling for a recession. Prominent technology companies, media organizations and banks, including Google, Amazon and Goldman Sachs, has laid off thousands of employees and set off alarm bells. And weaker sales trends have made retailers, i.a Macy’s and Lululemonrecently warning investors of a tougher year ahead.
But so far, retailers have largely avoided cutbacks. Instead, they are still struggling with a tight labor market.
Retail, compared to other industries, tends to have higher attrition rates than other industries — allowing employers to manage headcount by slowing job backfilling, said Gregory Daco, chief economist for EY Parthenon, the global strategy consulting division of Ernst & Young.
Still, he said retailers are also planning cautiously. In the last 18 months they have had to work harder to recruit and retain workers. If they lose too many employees, he said, it can become expensive to hire and train new employees.
“Any retailer needs to think carefully and think twice about laying off a good portion of their workforce,” he said.
In Walmart’s employee memo, Furner said the pay increase will be part of many employees’ annual raises. Some of those wage increases will also go to store employees who work in parts of the country where the labor market is more competitive, the company said.
Walmart sweetens other perks to attract and retain employees, too. Furner said the company is adding more college degrees and certificates to the Live Better U program, which covers tuition and fees for part- and full-time employees. It is also creating more high-paying roles at its car 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 in development. Please check back for updates.