Worlds largest retailer raises wages but $11-an-hour rate remains far below the $15 unions say is needed
Walmart said on Thursday it would raise entry-level wages for hourly employees to $11 an hour as it benefits from the biggest overhaul of the US tax code in 30 years.
The worlds largest retailer said the increase would take effect in February and that it would also expand maternity and parental leave benefits and offer a one-time cash bonus, based on length of service, of up to $1,000.
Hours after it made the announcement Walmart said it was closing 63 of its warehouse Sams Club stores with the loss of thousands of jobs.
The pay increase and bonus will benefit more than 1 million US hourly workers, it said, but the pay increase remains far below the $15 an hour unions and pressure groups say is needed to make up for decades of low growth in retail wages.
Walmarts announcement follows companies like AT&T, Wells Fargo and Boeing, which have all promised more pay for workers after the Republican-controlled US Congress passed a tax bill last month that cut the corporate tax rate to 21% from 35%.
Donald Trump and his fellow Republicans have argued that the big corporate tax cut will benefit workers and lead to more investment by US companies.
We are in the early stages of assessing the opportunities tax reform creates for us, the president and chief executive officer, Doug McMillon, said in a statement. The tax law gives the retailer an opportunity to be more competitive globally and to accelerate investment plans for the United States, he said.
The increase in wages will cost approximately $300m on top of wage hike plans that had been included in next fiscal years plans, the company said.
The company is offering a one-time bonus to all full- and part-time employees based on their length of service, rising to $1,000 for employees with 20 years of service. The one-time bonus will amount to $400m in the current fiscal year.
The current minimum wage at Walmart is $9 an hour, which was introduced in 2015. As of 2016, employees who finish an internal training program are eligible for $10 an hour. The retailer says it has spent about $2.7bn to increase wages over the past few years.
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