WalMart Stores announced on Wednesday that over 1.2 million of its full-time WalMart and Sam’s Club employees would get a pay increase, as the retailer hopes to stem defections amidst a tight labor market.
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Previous year in February, the company announced its plans to raise minimum wage to $9 per hour by April 2015, while the second raise for $10 was planned for 2016.
All associates hired before January 1st, 2016 will earn at least $10 per hour.
When these changes go into effect, Walmart’s average full-time hourly wage will be $13.38/hour.
Wal-Mart said the raises, which will take effect on February 20, would rank as one of the largest single-day private-sector pay increases ever. It also will start allowing workers to accrue paid time off as they earn it. The announcement, part of a two-phase pay hike that began past year, comes a week after the world’s largest retailer said it would shutter 154 stores in the US and lay off up to 10,000 people.
Wal-Mart is offering a short-term basic disability plan for workers who need to be away for an extended time.
Wal-Mart as a whole is not suffering, though the Walton family would have you believe otherwise. The company’s profit for the next fiscal year is expected to drop by 12 percent as a result of the move. But labor activists said the closures were meant to punish workers who have campaigned for higher pay – an accusation that Wal-Mart denies.
The group behind Making a Change at Wal-Mart – a longstanding campaign for better employment terms – said the pay raises are nothing but a publicity stunt. A compulsory training of six months will have to be undertaken by the new employees prior to becoming eligible for receiving hourly earnings of $10. Indiana Trust & Investment Management Company increased its position in Wal-Mart Stores by 0.9% in the fourth quarter.
The steps are part of a previously outlined two-year $2.7 billion investment in wages, benefits and training. It’s also launching a simplified paid time off (PTO) program that will make vacation days more readily accessible. “There might be some pressure on the retail side, but that doesn’t tell me that wage growth is breaking out”, says Joseph LaVorgna, chief US economist at Deutsche Bank. Then last June, Wal-Mart said it would raise starting wages for more than 100,000 USA department managers. Walmart instead will focus on strengthening Supercenters, optimizing Neighborhood Markets, growing the e-commerce business and expanding Pickup services for customers.
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In total, the impacted stores represent less than 1 percent of both global square footage and sales.
