Wal-Mart is raising the minimum wage as the retail job market remains tight

Walmart On Tuesday, it said it was raising the minimum wage for store employees to $14 an hour, which is a jump of nearly 17% for workers who stock shelves and cater to customers.

Starting in early March, store employees will earn between $14 and $19 an hour. They currently make between $12 and $18 an hour, according to Walmart spokeswoman Ann Hatfield.

With the move, average hourly wages in the US for the retailer are expected to be more than $17.50, Wal-Mart CEO John Furner said in a staff-level note Tuesday. That’s an increase from the average $17 an hour.

Hatfield said about 340,000 store employees will get a raise because of the move. This represents a pay rise for approximately 21% of Walmart’s 1.6 million employees.

The retail giant, the nation’s largest private employer, is raising wages at an interesting moment. Weaker retail sales trends pushed companies, incl Messi And lululemon, to recently warn investors of a tougher year ahead. Some economists call for a recession amid persistent inflation and shifting consumer habits.

Notable technology companies, media organizations, and banks, incl The GoogleAnd Amazon And Goldman SachsThey laid off thousands of employees and set off alarm bells. However, the job market remained strong. Nonfarm payroll growth slowed slightly in December, but was better than expected. The number of Americans filing new applications for unemployment benefits fell last week.

So far, retailers have largely avoided job cuts. Instead, they continue to struggle with a tight labor market.

Compared to other industries, retail, says Gregory Daco, chief economist at EY Parthenon, the global strategy advisory arm of Ernst & Young, tends to have a higher rate of growth than other industries — allowing employers to manage their headcount by slowing backfill. Jobs.

However, he said retailers may also be planning cautiously. Over the past 18 months, they have had to work harder to recruit and retain workers. If they lose too many employees, he said, hiring and training new employees can be costly.

“Any retailer is going to have to think twice and think twice about shedding a good share of its workforce,” he said.

In a Walmart employee note, Forner said the pay rise will be part of the annual raises for many employees. Some of those pay increases will also go to store employees who work in parts of the country where the job market is more competitive, the company said.

Wal-Mart is improving other franchises to attract and retain employees as well. Forner said the company is adding more college degrees and certificates to the Live Better U program, which covers tuition and fees for part- and full-time workers. It’s also creating more high-paying roles at auto care centers and hiring employees to become truck drivers, a job that can pay up to $110,000 in the first year.

Other retailers were ahead of Wal-Mart in employee payroll. license platefor example, announced in 2017 that it would gradually raise the minimum wage to $15 an hour in July 2020. A competing big-box player, which operates stores in cities with a higher cost of living, like New York City and San Francisco, has rolled out a college degree program. Debt free in 2021.

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