Wal-Mart Stores Inc. is boosting its starting hourly wage to $11 and delivering bonuses to employees, capitalizing on the US tax overhaul to stay competitive in a tightening labor market.
The pay increase, Wal-Mart's third minimum wage increase since 2015, and bonus will benefit more than 1 million United States hourly workers, it said.
Target raised its minimum hourly wage to $11 in October, and will raise wages to $15 by the end of 2020.
A one-time bonus benefiting all eligible full and part-time hourly associates in the U.S. The amount of the bonus will be based on length of service, with associates with at least 20 years qualifying for $1,000.
The company is also creating a new benefit to assist employees with adoption expenses.
"Tax reform gives us the opportunity to be more competitive globally and to accelerate plans for the U.S.", Chief Executive Officer Doug McMillon said in Thursday's statement. "It's our people who make the difference and we appreciate how they work hard to make every day easier for busy families".
Walmart is using the windfall the GOP just gave Corporate America to score a public-relations coup, with a strategic move that would have been smart even without a tax cut.
This increase in wages to associates will take effect in February and will be approximately $300 million incremental to what was already included in next fiscal year's plan.
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"Tax reform gives us the opportunity to be more competitive globally and to accelerate plans for the U.S.". Previously, birthing mothers got six to eight weeks at half pay.
Parental leave has been another area in which retailers including Target and Ikea have been trying to offer better benefits.
With this move, the world's largest private employer has scored big points with Republican politicians, who now have a talking point for the campaign trail, and maybe also from shoppers who see its wage increase as socially responsible.
"A better solution would be to raise the federal minimum wage and not leave it up to corporations", Gould said. Hourly workers will be paid between $11 and $24.70 an hour.
Walmart also announced expansion of its paternal and maternity leave policy, providing full-time hourly employees with 6 weeks of paid paternal leave and 10 weeks of paid maternity leave. Currently, Walmart's starting wage is $9, which goes up to $10 once employees complete a training program.
Plus, Walmart knows from experience what raising wages can do to help boost business.
Lately, much of the talk about Walmart's showdown with Amazon.com has centered on the old-school retailer building stronger e-commerce muscles.