Walmart raises the minimum wage for its US employees. $11 and distributed bonuses of up to $1,000, which credited President Trump’s tax cut for admitting the move.
The increase for the country’s largest private employer is also under political pressure to raise the minimum wage and is in the midst of a positive trend for the retailer.
The chain of department stores, which has more than one million workers per hour in the US UU, will receive an unexpected benefit from the reduction in the corporate tax rate of the United States Up to 21%, less than 35%.
“Today, we use the investments we have invested in our people, their salaries, and their skills development,” said Walmart CEO Doug McMillon in a statement. “It’s our people who make the difference and we value their hard work to make it easier for busy families every day.
The measure also comes in the middle of at least 17 years for the unemployment rate in the United States, which has exacerbated the competition for workers.
McMillan said the Trump corporate tax reduction “gives us the opportunity to be more globally competitive and accelerate plans for the United States.”
At the same time, Walmart confirmed on Thursday that it would close around 50 Sams Club stores and turn a dozen into online distribution centers. These closures suggest that the retail landscape continues to be extremely difficult for some brands.
The announcement of Walmart’s salary increase follows a series of similar moves by large companies that have also credited tax cuts to boost their businesses.
For example, AT & T and Comcast distributed $1,000 one-time bonuses to non-management employees, and Wells Fargo and Fifth Third Bancorp raised base-hour wages to $15.Economists have argued that single premiums, which are important for workers with paid wages, are not as important as permanent pay increases. Critics of the tax reform said companies are distributing bonds for good publicity and winning favor with the White House.
“Walmart is likely to have reached at least $11 in many markets to keep reliable employees,” said Professor Erik Gordon of the University of Michigan. “The tax cut made it easier for the company to swallow.”
But, says Gordon, the measure states that “corporate tax cuts announced by critics may occur”.
Charles Fishman, the author of the Wal-Mart effect, said the move shows that the retailer is counting on strong economic growth over the next two or three years. It also reflects the recognition that Walmart “needed to improve his game to retain his staff and recruit new employees,” he said.
“They have begun to change the way they treat employees because they can no longer take them for granted,” said Fishman.
Walmart’s salary increase will take effect in February. The company said the one-time bonds would cost the company $400 million and would be based on the duration of the service. Employees who have worked for at least 20 years receive a total of $1,000, but most receive up to a few hundred dollars.
The company also raises its full-time employee policy to 10 weeks with full pay. Previously, mothers received half-pay between six and eight weeks. Walmart is also increasing its paid leave policy for new parents, non-mothers, adoptive parents and adoptive parents for six full-time employees. Previously, the company did not offer them a paid leave. Walmart also said it would provide financial support to hourly and full-time employees who want to adopt children.
The increase in the minimum wage occurs about a year after Walmart raised the hourly wage for most workers to at least $10. Twelve states already have a minimum wage of at least ten dollars, according to the Economic Policy Institute.
The salary increase occurs when Walmart plays a role. While many traditional retailers struggle to keep up with online giant Amazon, Walmart was better. Walmart’s online business is growing.