Walmart Raises Starting Pay for U.S. Employees

With workers in short supply, the increase will bring the retailer’s average hourly pay to over $17.50.

January 25, 2023

BENTONVILLE, Ark.—Walmart is raising its starting wage for all U.S. store and warehouse employees to at least $14 an hour, up from $12 an hour, reports The Wall Street Journal.

The raise will increase the company’s average hourly wage to over $17.50. Current Walmart employees make $17 an hour on average. About 340,000 of Walmart’s 1.6 million U.S. workers will see a raise in their March paychecks related to the change, a spokeswoman told the Journal.

Walmart competes with other retailers for the limited U.S. labor pool. Target pays its workers at least $15 an hour and up to $24 an hour depending on the market, and Target employees have access to flexible scheduling, well-being benefits, team member discounts and other perks. Amazon recently announced an investment of $450 million in wage increases and other benefits for drivers who are part of its Delivery Service Partners network. Starbucks starts pay at nearly $17 an hour, and Costco workers get at least $17.50 an hour.

Convenience retailer Rutter’s, based in York, Pennsylvania, recently announced another increase to its starting wage, with pay beginning at $17.50 per hour. This is the company’s second increase of the year, and seventh in three years.

These starting hourly wages are higher than the convenience store industry average. In 2021, the average full-time associate starting wage at a convenience store was $13.14 an hour, and the average part-time sales associate wage was $11 an hour, according to the NACS State of the Industry Compensation Report® of 2021 Data.

Walmart says that on average, entry-level associates are promoted to positions of higher wages and more responsibility in seven months. Seventy-five percent of Walmart’s U.S. salaried management team in stores, clubs and supply chain began their careers as hourly associates, including CEO Doug McMillon.

Walmart is also adding new college degrees and certificates to its Live Better U education program. Full-time and part-time employees receive 100% tuition reimbursement through the program.

“These new options are focused on where our business is headed and will equip associates with skills to unlock new career opportunities,” said John Furner, president and CEO, Walmart U.S. associates, in a post announcing the changes.

Walmart’s pay increase comes at a time when the labor market is showing signs of slowing. In December, the U.S. added 223,000 jobs, which was the fewest per month in two years; however, the unemployment rate was 3.5% last month, matching multidecade lows, and there are still far more jobs available than unemployed people. Nearly a quarter of available jobs in the U.S. were in the retail and leisure and hospitality sectors, reports the Journal.

Wages are also up, as companies are paying their workers more to stay. Average hourly earnings for nonsupervisory retail workers rose 4% to $19.93 year over year in December, while wages were up 5% from a year earlier to $28.07 for private-sector workers not in supervisory roles.

Job seekers in retail and leisure and hospitality can often find jobs that pay more, making it enticing to switch, Layla O’Kane, senior economist at Lightcast, told the Journal. Those who switched jobs saw an average wage gain of 7.7% in November year over year.

Companies are also incentivizing employees to remain for their first 90 days on the job, which executives and human resource specialists say is key to long-term retention. Other companies believe innovative scheduling is the key. One Chick-fil-A in Miami has been using a three-day workweek to recruit and retain employees, and it’s working. Fast-casual restaurant chain Dig is testing a four-day workweek with its full-time staff.

NACS hosted three webinars last summer that discussed innovative ways to address the labor shortage facing the convenience retailing industry, including flexible and innovative scheduling.

NACS has partnered with Good Jobs Institute to explore how c-store operators can provide “good jobs,” those that meet people’s basic needs and offer conditions for engagement and motivation. The Good Jobs Calculator, designed exclusively for NACS members and the convenience industry, allows retailers to use their own data and customized assumptions about the amount of improvement or uplift achievable, enabling executives to run scenarios on the bottom-line impact of a Good Jobs system.