– Tax reform is driving Walmart to raise its starting hourly wage to $11 and
give bonuses of up to $1,000 to employees, Bloomberg
reports. The new wage will go into effect in February. Walmart will pay $300
million in addition to yearly raises already planned previously. The company
will shell out another $400 million in the form of one-time bonuses to reward
workers who won’t benefit from the higher starting wage. Walmart also plans to expand
maternity and paternal leave policies, and include an adoption benefit to its
“We’ve seen wage
stagnation for many years, so it’s super important for lower-wage workers to
see their wages rise,” said Elise Gould, a senior economist at the Economic
Policy Institute. “It’s due to two factors—state-level increases and a
tightening labor market.”
initially raised its starting hourly wage to $10 two years ago, states have
enacted their own minimum wage thresholds. Washington, D.C., California,
Massachusetts and Washington have a minimum wage of $11 per hour, while
Arizona, Colorado, Maine, New York and Oregon will achieve that level in 2018.
Eighteen states have a higher minimum wage this year.
AT&T Inc., Boeing Co. and Wells Fargo & Co. in announcing the use of
tax reform to benefit employees. “Tax reform gives us the opportunity to be
more competitive globally and to accelerate plans for the U.S.,” said Walmart
CEO Doug McMillon.
“We think this is
a prudent use of tax reform proceeds, as it reinforces the company’s commitment
to improving in-store service levels and will pressure other retailers to
invest more heavily into wages and prices,” said Stephens analyst Ben Bienvenu.