Wal-Mart Stores, the nation’s largest private employer, is doling out pay increases to about 1.2 million hourly workers.
Under a plan announced Wednesday, workers hired before Jan. 1 first will earn at least $10 an hour starting Feb. 20. Or if workers of that tenure already made more than $10 an hour, they’ll get at least a two percent raise.
New entry level workers will continue to start at $9 an hour but will move to at least $10 an hour after completing a training program. In addition, associates currently at the maximum of their pay band will receive a one-time lump sum payment equal to 2 percent of their annual pay.
The company said the changes will push wages of full-time hourly Wal-Mart workers to $13.38 an hour and to $10.58 an hour for part-time workers.
The retailer also said it’s giving full-time hourly workers short-term disability benefits at no cost. A new paid time off policy will let full and part-time workers use their days off as they accrue them.
Wal-Mart has been under a lot of pressure from labor groups to boost wages. And the economic pressure has been mounting, too, as the labor market improves.
Wages in the U.S. had an over-the-year growth rate of 2.5 percent in December. That rate is low by historical standards but is still an improvement over recent years.
“We’re moving in the right direction,” said Mark Zandi, chief economist at Moody’s Analytics.
Zandi said competition for workers is increasing. And boosting wages helps employers recruit workers and avoid turnover, which Zandi said is costly.
“You have to bring in new people and train them,” he said. “At the end of the day it’s probably better to pay a little bit more to your existing workers and retain them, and then you don’t have to pay those training costs.”
Wal-Mart‘s wage hike news came about a week after it said it would close 269 stores. But the company said the two moves are unrelated.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.