Walmart raises minimum wage as retail labor market remains tight

An employee arranges gift boxes of beauty products displayed for sale at Wal-Mart Inc. stores. in Los Angeles, California.

Patrick T. Fallon | Bloomberg | Getty Images

Walmart said Tuesday it was raising its minimum wage for store employees to $14 an hour, a roughly 17 percent jump for workers who stock shelves and serve customers.

Beginning in March, store clerks will make between $14 and $19 an hour. They currently earn between $12 and $18 an hour, according to Walmart spokeswoman Anne Hatfield.

With the move, the average salary for a U.S. retailer is expected to be more than $17.50, Walmart U.S. CEO John Furner said in a memo to employees Tuesday.

About 340,000 store employees will get a raise because of the move, Hatfield said. That equates to a pay raise for roughly 21 percent of Walmart’s 1.6 million employees.

The retail giant, which is the nation’s largest private employer, is raising wages at an interesting time. Some economists are calling for a recession. Prominent technology companies, media organizations and banks including Google, Amazon and Goldman Sachsi have laid off thousands of employees and set off alarm bells. And weaker sales trends pushed retailers including Macy’s and Lululemonto recently warn investors of a tougher year ahead.

But retailers have largely avoided job cuts so far. Instead, they are still struggling with a tight job market.

Retail, compared to other industries, tends to have more attrition than other industries — allowing employers to manage their headcount by slowing job filling, said Gregory Dako, chief economist at EY Parthenon. the global strategic consulting unit of Ernst & Young.

Still, he said retailers may also plan cautiously. Over the past 18 months, they have had to work harder to recruit and retain workers. If they lose too many employees, he said, hiring and training new employees can be expensive.

“Every retailer will have to think carefully and think twice about letting go of a good portion of their workforce,” he said.

In the memo to Walmart employees, Furner said the wage increase will be part of many employees’ annual raises. Some of those wage increases will also go to store employees who work in parts of the country where the labor market is more competitive, the company said.

Walmart sweetens other perks to attract and retain employees. Furner said the company is adding more college degrees and certificates to its Live Better U program, which covers tuition and fees for part-time and full-time workers. It is also creating more high-paying roles at its car care centers and recruiting employees to become truck drivers, a job that can pay up to $110,000 in the first year.

This story is evolving. Please check back for updates.

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