12 January, 2018
Wal-Mart Stores Inc. will raise the starting wage rate for all of its USA hourly associates to $11, expand maternity and parental leave benefits, and give eligible full- and part-time employees a one-time cash bonus of up to $1,000.
The company, which is the nation's largest private-sector employer, said it's also expanding its parental and maternity leave policy. Retailers, in general, have one of the highest average effective tax rates because a majority of their operations are in the US.
"Tax reform gives us the opportunity to be more competitive globally and to accelerate plans for the U.S.", Walmart CEO Doug McMillon said Thursday. "It's our people who make the difference and we appreciate how they work hard to make every day easier for busy families".
Economists have argued that one-time bonuses, while significant for workers living paycheck-to-paycheck, are not as meaningful as permanent wage increases.
The company said the changes are a way to allow workers to "share in tax savings". Paying workers more will help ensure those stores are pleasant shopping environments - a necessity for Walmart if it is to keep growing its sales. President Donald Trump cheered the announcement with a tweet, saying, "Great news, as a result of our TAX CUTS & JOBS ACT!" But it's safe to say that, over 10 years, this corporate tax cut will be worth over $18 billion to Walmart.
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Walmart's wage increase will take effect in February. The one-time bonus will amount to $400 million in the current fiscal year and the company will take a one-time charge in the fourth-quarter of the current fiscal year to account for the charge.
Walmart, the favorite target of attacks on the left for exploiting their workforce, will include a one-time cash bonus to eligible employees as high as $1,000, depending on seniority. Additionally, the Bentonville, Ark. -based mega-retailer is creating a new benefit to help associates with adoption expenses. Salaries associates will also receive six weeks of paid paternal leave. Full-time hourly workers will also receive 10 weeks of paid maternity leave and six weeks of paid parental leave. Previously, the company didn't offer any paid leave for them. Hourly workers will be paid between $11 and $24.70 an hour.
The company raised its minimum wage to $9 an hour in 2015.
The minimum wage increase comes about a year after Walmart hiked hourly pay to at least $10 for most workers. The federal minimum wage is $7.25. The idea is to reward employees who won't benefit from the new starting wage.
Lately, much of the talk about Walmart's showdown with Amazon.com has centered on the old-school retailer building stronger e-commerce muscles.