- Walmart announced that it would raise the wages of some workers while maintaining the starting wage of $ 11.
- CEO Doug McMillon said the increases will help the company create a “ladder of opportunities”.
- He also said that a minimum wage of $ 15 should be calculated in a way that would benefit the US economy.
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Walmart announced on Thursday that it would raise wages for some workers while maintaining a starting salary of $ 11.
Chief Executive Doug McMillon said the increases are designed to create a “ladder” system for worker promotions at the country’s largest retailer and largest private sector employer. The increase, which will raise the salary of 425,000 members between $ 13 and $ 19 an hour, will take effect on March 13.
“These people for whom we are raising salaries tend to be with us longer than someone who could be earning the starting salary,” said McMillon in an investor conference call. “We are trying to … create this ladder of opportunities, providing an opportunity for people, when they start at the company, to build a career like many of us already have.”
The company chose not to increase the starting salary, which will be $ 11 an hour, despite pressure to raise the minimum to $ 15 an hour. In recent years, competitors such as Amazon, Target and Costco have raised their minimum wage to $ 15 an hour in recent years, after groups of workers and labor advocates have called for the increase. Walmart says its average salary in the U.S. is over the $ 15 an hour limit.
McMillon said the company would not be able to implement the ladder structure – which was designed to help employees move up the company – if a $ 15 minimum wage was applied. However, he said the company, which has increased wages from $ 9 to $ 11 over the past five years, plans to continue raising wages over time and will meet state minimum wages.
McMillon also said the investment will help support Walmart’s new structure that prioritizes digital sales – an industry that has skyrocketed since the coronavirus pandemic began. McMillon said in the past that he supports efforts to raise the minimum wage above $ 7.25, where it has been locked since 2009. President Joe Biden plans to include the increase in his $ 1.9 trillion stimulus plan.
Several Democratic Party members also advocated a “living wage” and plan to raise the minimum wage to $ 15 by 2025. The nonpartisan Congressional Budget Office released an analysis of the party’s Wage Increase Act in February, which concluded that the wage increase can result in 1.4 million jobs lost.
“Obviously, we are very aware of what is happening nationally with this discussion at around $ 15 and we think this is an important goal, but we also think it should be measured in a way that is good for the US economy,” said McMillon. “You can see us as a model, working to find out how it works, but I am very excited to raise wages today for so many people.”
In the fourth quarter of 2020, Walmart’s digital sales exceeded Wall Street expectations three times as customers sought to shop at home during the pandemic and demand for household products increased as consumer behavior favored inventory , said CFO Brett Biggs on the call. Walmart recorded nearly $ 100 billion in sales in the fourth quarter. US sales alone grew by $ 29 billion.
“This year has really moved things forward in terms of customer behavior and we think most of that behavior will last,” said McMillon of customers’ interest in online shopping.