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Walmart gives workers a raise and weighs in on the minimum wage debate

February 19, 2021Written by George Anderson

Photo: Walmart

Walmart made a lot of news yesterday. The retailing giant announced that its same-store sales in the U.S. increased 8.6 percent during its fiscal fourth quarter as online sales jumped 69 percent. Management also said it plans to make $14 billion in capital investments over the next year, its highest number in years, as it seeks to automate and scale fulfillment activities across the chain’s network of stores, local fulfillment centers and market warehouses. Of all the Walmart news, none gained more attention, however, than the announcement that it would raise wages for 425,000 associates in the U.S. who stock shelves and fulfill orders from its various points of distribution. The retailer said it would increase pay for these workers to a range of $13 to $19 an hour based on location and tenure. The bump, which is to take effect on March 13, will raise the average wage for these workers to over $15 an hour. Walmart said that it would eliminate quarterly bonuses paid to these associates after the first quarter. A spokesperson for the retailer told The Wall Street Journal, “The overwhelming majority of our associates say their hourly wages are the most important part of their pay.” She said associates prefer the certainty of hourly pay over bonuses that fluctuate from one quarter to the next. A Yahoo Finance article asserted that Walmart’s decision to raise wages will put pressure on rival retailers and could hurt the recruiting and retention efforts of dollar stores in particular. In an interview with CNBC, Walmart CEO Doug McMillon said the company supports a raise in the federal minimum wage from its current level of $7.25 an hour but he is not behind moving that to $15 an hour as advocated by the Biden administration and Democratic Party members in Congress. Instead, he is promoting, indexing the minimum based on location and cost of living. Mr. McMillon said in the interview that he believes that a phased-in approach with a minimum indexed to location and cost of living would provide businesses of all sizes with certainty around wages so they could plan appropriately. The Walmart CEO’s position is not new. He advocated for the same phased-in and indexed approach last June in his capacity as CEO of the Business Roundtable, a lobbying group composed of the nation’s leading chief executives.

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