Walmart has promised raises in hourly pay for 425,000 employees, according to the Wall Street Journal article by Sarah Nassauer. Many factors played a role in this decision, and the impacts are sure to be widespread too.
One reason for the increase could be due to Walmart bracing itself for the potential raise in the federal minimum wage to $15 an hour proposed in President Biden’s Covid-19 Relief Plan. The current federal minimum wage is only $7.25 an hour. As of January 2020, Walmart’s average hourly worker made just over $14 an hour, but they aim to raise this average to $15 an hour with these new pay increases. Doing this before it is mandated not only looks good for Walmart, but also gives them the power to phase it into practice in their own timing.
Another motivation for these pay raises comes from Walmart’s competition with Amazon for warehouse workers. Amazon raised their starting wages to $15 an hour all the way back in 2018. These kinds of workers are more important than ever due to increased demand stemming from the pandemic. Other competitors like Target and Best Buy also offer a starting wage of $15 an hour.
Walmart also predicts that this change will be largely beneficial to its workers. In the past, Walmart has given quarterly bonuses to employees. However, they feel that a raise in hourly wage offers predictability that is important to employees and more helpful than infrequent bonuses.
Even with this impending increase of wages, Walmart lags behind national averages in retail. According to the Labor Department, non-supervisors make an average of $18.17 an hour. Perhaps in order to keep up with the steep competition of the retail sector, Walmart will have to continue this recent trend of raises for their workers.