Walmart just revealed last week that it will raise its minimum wage for employees, and as America’s largest private employer, this is significant news. As CNN reports, the department store chain’s minimum wage will increase from $12 to $14 an hour as it tries to “retain store and warehouse workers in a tight labor market for lower-wage industries.”
Here’s what we know:
READ MORE: Shoppers Are Shocked By These $27 Eggs Found At Walmart After Price Increases
Breaking: Walmart is increasing its minimum wages to $14 an hour, per sources and confirmed by the company.
The change goes into effect in March. The previous minimum wage was $12 an hour.
More for @BusinessInsider: https://t.co/FBT39hDIOZ
— Ben Tobin (@Ben__Tobin) January 24, 2023
Walmart Announces $2 Minimum Wage Increase For Workers
Walmart currently has 1.7 million workers in the United States, CNN points out, “94% of whom are hourly employees,” according to its latest annual securities filing. The department store chain memorably hired thousands of employees during the COVID-19 pandemic to “meet strong consumer demand for groceries and other goods,” the outlet notes.
In many areas of the United States, particularly southern states that have not adopted higher wage laws, “Walmart’s starting wage often serves as the local minimum wage,” CNN reports, adding that the company’s increasing minimum wage move is “likely to have a ripple effect across the service industry.”
Many labor groups have criticized Walmart for low pay, but it has been notably raising wages in the past few years. Its latest decision will close the gap with Amazon, Target, Costco, and other rival stores as Amazon and Target have a $15 minimum wage and Costco’s starts at $17 an hour.
#Walmart will increase its minimum wage to $14 an hour. This move will boost the company’s U.S. average hourly pay to about $17.50 for hundreds of thousands of employees. https://t.co/sMKidJ0e47
— HR Dive (@hrdive) January 26, 2023
How Walmart’s Move Can Effect Retail Workers Elsewhere
Walmart’s wage hike, CNN notes, “reflects pressure on chains to raise pay in a battle for labor.” Walmart is attempting to compete with rivals “as well as cities and states” that have been raising their minimum wages. (The federal minimum wage has been $7.25 an hour since 2009, and Washington State has the highest minimum wage in the country at $15.74).
Demand for service industry workers continues to remain strong, even as countless companies (including Walmart) have laid off corporate staff in the past few months. CNN also adds that Walmart currently has nearly 30,000 store jobs listed on its hiring website.
17% increase in starting wages.
Walmart raises minimum wage as retail labor market remains tight https://t.co/zi7RHlc98x
— Mark Henline (@markhenline) January 25, 2023
According to the latest Labor Department reading, the number of job openings stood at 10.5 million in November 2022, which is high by historical standards and much more than the 6 million unemployed people searching for a job that month. There were also more than 1 million job openings in the retail sector.
Andy Challenger, the senior vice president at outplacement firm Challenger, Gray & Christmas, said in an email to CNN, “The labor market remains competitive, particularly at this level. Hourly workers are still hard to find, and companies are continuing to compete for them by raising wages.”
Walmart CEO John Furner announced Tuesday the corporation’s minimum wage for its U.S. workforce of nearly 1.7 million will increase this year, telling associates in a company-wide memo the move is one of several ways “we’re focused on investing in you.” https://t.co/cDgh3sn2dc
— News 6 WKMG (@news6wkmg) January 25, 2023
Walmart US Chief Memo Response
Walmart US chief John Furner said last week in a memo that the company’s wage hike will “ensure we have attractive pay in the markets we operate.” This decision, CNN concludes, also happens just as many low-wage workers “need larger paychecks to deal with rising costs of food, housing and other inflation pressures.”
