On Thursday, Walmart, the nation’s largest private employer, will increase the pay for workers to an average above $15 an hour. This will give a raise to 425,000 employees. Beginning March 13, the retailer said that store workers in digital and stocking positions will see their wages increase up to $13 to $19 per hour depending on store location.
It also said that its minimum starting wage will remain the same at $11 an hour despite the fact that its rivals Amazon and Target are now offering $15 an hour as starting pay. Walmart made this announcement together with its report on holiday-quarter earnings that were less than those predicted by Wall Street analysts. The earnings declined due to COVID-19-related additional expenses and increased investments in e-commerce. The company said that it expects moderate sales growth this year.
After these announcements Walmart shares fell by more than 5% in early trading. Last summer Target had raised its starting wage to $15. The company was planning to raise the minimum wage by the end of 2020, but the woes of the pandemic made the company give its employees the raise, several months earlier than its target.
Doug McMillon, Walmart CEO and chairman of the Business Roundtable had earlier said that the federal minimum wage should be higher. On Thursday, at a virtual investor meeting, McMillon said that the big box retailer had taken a different approach with its wage hikes. Instead of a uniform increase of $15 across the board, hourly wages were fixed based on the location of its stores.
He also said that the company is looking to create a “ladder of opportunity” for workers and noted that about three quarters of the store management had started as hourly employees. McMillon said that the retailer would raise its starting wage over time and that the company history had proved that.
President Joe Biden has often mentioned that its administration and Congress have been considering raising the minimum wage to $15 an hour across the nation from the current $7.25 per hour. However, the Democrats need bipartisan support to raise the minimum wage and many Republicans are against it