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Walmart announces pay hike for 425,000 U.S. employees

Key workers will receive an average wage that exceeds $15 an hour

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Photo (c) Sundry Photography - Getty Images
Walmart says it will raise wages for 425,000 U.S. employees to an average that’s just above $15 an hour, upping the ante in the debate over the minimum wage.

The announcement was included in the retailer’s fourth-quarter earnings report, which showed Walmart collected record revenue as 2020 came to an end. However, the company’s earnings per share fell below Wall Street’s expectations.

The coronavirus (COVID-19) pandemic was a large factor in the company’s revenue. As an essential business, it remained open in the early days of the pandemic when many of its smaller competitors were forced to close.

The company said it also got a strong boost from its online sales. E-commerce sales were 69 percent higher than during the fourth quarter of 2019.

To reward its employees, Walmart said it would increase the pay for its U.S. workers to an average above $15 an hour. However, new employees will continue to receive a minimum wage of $11 an hour.

Rewarding key job roles

The higher pay will go to employees who work in stocking and digital functions. John Furner, CEO of Walmart U.S., said these frontline workers have played a key role in serving customers during the pandemic.

“We saw major changes to customer behavior last year we believe will be lasting, and we have to continue working to stay in-stock, deliver items on time and provide the best omni experience possible,”  Furner told The Wall Street Journal.

The new pay scale takes effect on March 13 for workers stocking shelves and delivering curbside services. Employees in those jobs will see their wages rise to $13 to $19 an hour, depending on the market where the store is located.

Walmart has taken the position that the federal minimum wage should be increased from its present $7.25 an hour but that $15 an hour is too high for all areas of the country. Its rivals, meanwhile, have embraced a more uniform approach.

Target raised its minimum wage for all employees to $15 an hour last year. The retailer temporarily raised its wages by $2 an hour in March, saying increasing employee compensation for “a job incredibly well done” during the health crisis was “a reflection of our company’s values and simply the right thing to do.”

Amazon increased its minimum wage to $15 an hour in November. Founder and CEO Jeff Bezos said the company listened to its critics and decided it “wanted to lead.”

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