Walmart to give its lowest-paid workers a raise — well above minimum wage
NEW YORK (CNNMoney) — Walmart, the frequent focus of advocates for low-wage workers, is giving its lowest-paid workers a raise.
The company said 500,000 full-time and part-time associates, more than a third of its work force at Walmart U.S. stores and Sam’s Clubs, will receive pay raises in April to at least $9 an hour. That will be $1.75 above the federal minimum wage.
By next February 1, their pay will go to at least $10 an hour.
The company said workers will also have more control over their schedules, but it declined to give details of those changes. And it said it would invest more in training to give entry-level workers greater chance for promotion and other career advancement.
The wage scale and other improvement in work conditions will cost the company about $1 billion in this fiscal year.
Walmart’s pay and employment policies have been the focus of protest by some workers and outside labor groups seeking to organize Walmart employees. Black Friday protesters last year were demanding a $15 an hour pay minimum across the company.
Currently, only about 6,000 Walmart employees out of more than 1.2 million nationwide are paid at the $7.25 an hour federal minimum wage, according to the company. It employs more U.S. workers than any other business.
Once the company’s starting pay becomes $9 an hour in April, the average pay for full-time retail workers there will be about $13 an hour. Walmart has previously said that average already stands at $12.94 an hour.
The average part-time wage will be about $10 an hour, according to Carol Schumacher, vice president of investor relations for the company. Roughly half of its employees are part-time workers.
President Obama has proposed raising the federal minimum to $10.10 an hour, but Republicans in Congress have so far blocked those efforts. But many states have gone ahead and raised their own state minimum wage rates, either by action of the legislature or voter initiative.
“We’re not taking a position on what the government does,” said Schumacher. “But any time any company, whether it’s us or someone else, raises wages, it’s a help for the economy.”
The improved labor market, with employers hiring at their strongest pace since the 1990s, is giving workers a boost: The average wage nationwide climbed by 2.2% over the previous year, according to the Labor Department. The number of employees willing to quit jobs to look for or take new positions is also rising.
While Walmart says the higher wages should help reduce its turnover rate, Schumacher said these plans were in the works well before the recent pick-up in the job market. But Walmart is following the path blazed by others, including clothing retailer Gap and furnishings retailer Ikea, which already raised the wages of its lowest paid employees early last year.
OUR Walmart, the union-backed group organizing protests at Walmart, took credit for the company’s announcement.
“We are so proud that by standing together we won raises for 500,000 Walmart workers, whose families desperately need better pay and regular hours from the company,” said Emily Wells, a leader of the group. But she said the improved wages still fell well short of what was needed.
“With $16 billion in profits, Walmart can afford to provide the good jobs that Americans need — and that means $15 an hour, full-time, consistent hours and respect for our hard work.”
But the National Retail Federation, which has been a leader in the fight against raising the minimum wage, said Wal-Mart’s announcement was proof that a change in the minimum wage is not needed, saying it is an example of the “power of the marketplace.”
“Like many other retailers, Walmart made its decision based upon what is best for their employees, their customers, their shareholders and the communities in which they operate,” said Mathew Shay, CEO of the retailers’ trade group.
Yahoo CEO Marissa Mayer, a member of the Walmart board, tweeted that she was “so happy for Walmart associates and proud of Walmart management. A great leadership decision by [Walmart CEO] Doug McMillon.”