Walmart, the nation’s largest private employer, is sharply increasing starting salaries for its store workers as it struggles to recruit and retain workers amid a tight retail labor market.
On Tuesday, the retail giant said in a memo to employees that it would raise the minimum wage for store employees from $12 to $18 an hour, with wages in the range of $14 to $19 an hour.
In the memo, John Farner, chief executive of Walmart’s U.S. operations, said the increase was “to ensure attractive wages in the markets in which we operate.” The move will immediately affect approximately 340,000 of the company’s 1.3 million frontline hourly employees in stores nationwide.
For years, Walmart has come under pressure from unions, policy makers and activists to raise wages for its store workers. Pay increases announced Tuesday will lift average wages across Walmart stores from about $17 to about $17.50 an hour, but the company’s average wage still lags competitors such as Costco.
“We want to make sure we attract the best associates,” Walmart spokeswoman Anne Hatfield said in an interview.
The pay increases, which take effect in March, come at a time of still-high inflation, making it particularly difficult for low-wage workers whose salaries are being stretched by the cost of food, fuel and other basic necessities. situation.
Walmart’s move is also a strangely optimistic sign for the economy as a whole. He, one of America’s largest companies, is taking steps to keep employees, even as other major employers announce layoffs.
Mark Zandy, chief economist at Moody’s Analytics, said he was surprised Walmart had raised wages “significantly” given the risk of a recession.
“This suggests that Walmart doesn’t believe the economy will go into recession anytime soon, or that if it does, it will only be a short, gradual recession,” Zandi said in an email. there are,” he said.
The move may also reflect the long-term challenges retailers face in retaining workers as baby boomers age and the labor pool shrinks, he said.
While price increases would ease the burden of inflation on Walmart workers, they could inadvertently perpetuate the problem far and wide by pushing up wages across other sectors of the economy.
“Walmart’s move to raise the minimum wage could complicate wage pressures and the Fed’s efforts to quell inflation,” Zandi said. Hospitality and personal service are the Fed’s primary focus in fighting inflation. ”