Walmart to bump starting hourly pay up to $11

There are many logical, market-based reasons for Walmart and other employers to raise worker pay and performance; they didn't need a large corporate tax cut to do so.

Walmart (WMT), the largest private employer in the country, said it will raise its starting wages for USA store workers and offer some employees bonuses following passage of tax cuts in Washington.

Kolko noted that while overall wage increases were modest past year at around 2.5 percent, data through November showed that workers with only a high school degree got average raises of 3.6 percent, while hourly rates for less well-paid positions rose 3.1 percent.

"Congress, working closely with the President, took a monumental step to bring taxes paid by US businesses in line with the rest of the industrialized world", CEO Randall Stephenson said in a statement. Walmart said a "discrete" one-time charge will be taken in the fourth quarter of the current year to account for the bonus. According to the company, all of these wage and benefit changes will positively affect its 1 million-plus USA hourly associates.

Wal-Mart's wage hike follows one by Target (TGT), which increased its minimum wage to $11 an hour starting last October. With Wal-Mart's moves, companies are crediting the tax cuts for providing additional pay to more than 2 million workers. According to Carl Quintanilla of CNBC, almost 85,000 employees have 20 plus years of service and will qualify for the full $1,000, while another 200,000 or so will get $750. The payouts will total some $400 million, the company said. But it's safe to say that, over 10 years, this corporate tax cut will be worth over $18 billion to Walmart.

"Today, we are building on investments we've been making in associates, in their wages and skills development", said Doug McMillon, Walmart president and CEO.

While it's not entirely clear how large an impact the new tax law will have, Walmart should see a significant benefit.

On the heels of the USA tax overhaul, the world's largest retail Walmart (WMT) announced Thursday it plans on sharing the new wealth to its employees.

The pay increase may have also been spurred by competition from other retailers, who have announced similar pay boosts of their own. The payscale for hourly workers will be from $11 to $24.70 per hour, the company said. Full-time hourly workers in the United States will get 10 weeks of paid maternity leave and six weeks of paid parental leave. Also, EVP John R. Furner sold 1,200 shares of the company's stock in a transaction dated Friday, November 17th.

Walmart said the wage increases would add about $300 million in expenses to its budget for the next fiscal year.

Labor advocacy groups called the pay increase a "big win" for employees, but said it fell short of providing a living wage in many parts of the country.

"We will be able to invest even more in aircraft and facilities, and we will be able to do so with even greater confidence about the future", he said.


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