After Trump Tax Cuts, Walmart Raises Wages, Gives Bonuses, Helps with Adoptions

Jon Howard
January 12, 2018

Walmart, the world's largest private employer, is boosting its starting salary for USA workers to $11 an hour and handing out one-time cash bonuses.

Its rival Target had raised its minimum hourly wage to $11 in October, and said it would raise wages to $15 by the end of 2020.

Wal-Mart's announcement follows companies like AT&T Inc, Wells Fargo & Co. and Boeing Co., which have all promised more pay for workers after the Republican-controlled US Congress passed a tax bill that slashed the corporate tax rate to 21 percent from 35 percent.

Other policy changes Walmart announced Thursday - particularly an expanded parental and maternity leave policy - could further help the retailer attract and retain better workers. In addition to changing its benefit for mothers, the company will begin offering full-time hourly and salaried associates six weeks of paid parental leave, and associates who adopt a child will receive $5,000 in financial assistance.

The pay increase, Wal-Mart's third minimum wage increase since 2015, and bonus will benefit more than 1 million USA hourly workers, it said.

Wal-Mart employs about 2.2 million people globally, with more than 1.5 million in the U.S. and had total global revenue of almost $500 billion previous year.

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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.

CEO Doug McMillon said in prepared statement that recently enacted tax legislation "gives us the opportunity to be more competitive globally and to accelerate plans for the U.S".

The bonuses will be determined on an employee's length of service at the company, Wal-Mart said, and those workers with more than 20 years of experience will qualify to receive $1,000.

"Wal-Mart would have had to go to at least $11 in many markets in order to retain reliable employees", said University of MI business professor Erik Gordon.

The company also will provide full-time hourly workers with 10 weeks of paid maternity leave and six weeks of paternal leave. The retailer says it has spent about $2.7bn to increase wages over the past few years. The payscale for hourly workers will be from $11 to $24.70 per hour, the company said. About a dozen banks have said they will raise their minimum wages. The idea is to reward employees who won't benefit from the new starting wage. Walmart's online business is surging.

The move comes three years after Wal-Mart last announced it was raising wages, spending $1 billion in 2015 to lift starting hourly pay to $9 and then to $10 the following year - for workers who complete a 90-day training course.

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