Wal-Mart to Increase Wages for Most U.S. Store Workers -- Update
January 20 2016 - 3:41PM
Dow Jones News
By Sarah Nassauer
Wal-Mart Stores Inc. will give nearly all of its hourly store
employees a pay raise next month and not just minimum wage earners,
an attempt by the country's largest private employer to combat a
tighter labor market and chronic turnover.
The retailer previously announced plans to lift its minimum wage
to $10 on Feb. 20, and now Wal-Mart says all hourly workers
employed in stores as of Dec. 31 will get at least a 2% pay bump.
The wage increases will affect more than 1.2 million employees at
its Wal-Mart and Sam's Club stores.
The across-the-board pay hike is aimed at addressing concerns
raised by some longtime workers, who complained about the
more-generous starting wages for new hires. The company is also
trying to stem defections and the amount of money it spends to hire
and train new staff. Wal-Mart loses hundreds of thousands of store
workers each year, a Wal-Mart executive said last October.
Minimum-wage increases took effect in 20 states last year and
several of the biggest employers of hourly workers, including
McDonald's Corp. and Starbucks Corp., have also lifted their
starting pay. Average hourly earnings for retail workers was $14.95
in December, up 3.6% from a year earlier. With the February
changes, the average full-time Wal-Mart employee will earn $13.38
an hour, the company said.
In April Wal-Mart raised its minimum wage to $9 an hour,
sparking complaints from some employees that they made nearly the
same as a new hire with less experience, says Judith McKenna,
Wal-Mart U.S. chief operating officer. This time Wal-Mart wanted
all employees to benefit at once and to clearly communicate the
change, she said.
"That doesn't mean that we still won't have compression in the
organization," says Ms. McKenna, referring to when rising minimum
wages shrink wage differences for more senior employees. Still,
last April's experience taught Wal-Mart executives that employees
want to know "they will still be ahead of those who come from an
entry level position," says Ms. McKenna.
To achieve one day of companywide raises, Wal-Mart will move the
typical 2% annual pay increase to Feb. 20 instead of granting the
increase on store workers' date-of-hire anniversary. Employees that
have reached a wage cap will get a one-time payment equal to 2% of
salary.
Store employees were told of the change Wednesday morning.
In October company executives said wage increases would cost
about $2.7 billion over fiscal year 2016 and 2017, driving down
next fiscal year's profit by as much as 12% and depressing the
company's share price. The 2% wage increase is included in that
figure, said Ms. McKenna.
Shares of the company were down 3.2% in recent trading, amid a
broad market rout. Over the last 12 months, its shares have fallen
30%.
Lauren Weber contributed to this article.
Write to Sarah Nassauer at sarah.nassauer@wsj.com
(END) Dow Jones Newswires
January 20, 2016 15:26 ET (20:26 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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