Walmart is raising the minimum wage it pays its retail employees from $12 to $14 per hour.
Retail work is not known for its stellar pay, except at a few notable companies. So, the latest news for Walmart workers was a pleasant surprise. The retail giant announced on Tuesday that many of its hourly employees would get a significant pay bump.
Walmart trails well behind some of its major competitors in its employee pay. The current minimum wage for Walmart workers nationwide is $12 per hour. And that is significantly lower than other major retailers.
Costco has historically led the pack, offering top dollar for even its most entry-level positions. The current minimum wage at its locations is $17 per hour. Target and Amazon are not too far behind, with both companies offering a starting wage of $15 per hour.
So, Walmart workers definitely don’t make even close to what their peers do. But that will soon change. The company plans to raise its minimum wage by a whopping $2.
While that doesn’t sound like much, it brings pay for their starting positions closer to other industry leaders. And that is vitally important in a highly competitive hiring environment. “Walmart’s wage hike reflects pressure on chains to raise pay in a battle for labor,” according to CNN.
However, the wage bump for Walmart workers will have far-reaching ripple effects. “Walmart has 1.7 million workers in the United States, 94% of whom are hourly employees, according to its latest annual securities filing.” Not all employees are currently getting paid less than $14 per hour.
However, Walmart workers are under that threshold, which will have a significant financial impact on the company. With any luck, that cost won’t get passed on to the consumer. But time will tell.
And in some parts of the country, Walmart is the leading employer. So once this minimum wage for Walmart workers goes into effect, it will directly impact other companies in the area. Many of those are smaller businesses that cannot compete with higher wages.
The pay bump comes at an interesting time in the national labor market. News headlines about massive corporate layoffs have dominated for months. And Walmart has experienced its own share of cuts.
However, front-line retail workers are still in high demand. Walmart alone has 30,000 open retail positions. That is but a drop in the bucket, though.
Nationally, there were over 1 million open retail positions, at least as of last November. And that is but a small chunk of the 10.5 million openings in total. What is most intriguing is that there are not enough workers to fill those roles.
The latest Labor Department report released in November showed only 6 million unemployed workers. That’s a significant gap. So, competition for retail workers is fierce.
That is good news for Walmart workers and those looking for a position. They win on two counts. First, and most importantly, they get a much-needed pay bump.
But even better, many Walmart workers will have a little extra money when it is most needed. Many hourly employees struggle to navigate our current inflation with their low pay. This should help alleviate at least some of the burden.