Walmart Is Raising Its Starting Salary To $11 An Hour — Here's What To Know
Walmart, the country's largest employer, announced today that it will "increase the starting wage rate for all hourly associates in the U.S. to $11, expand maternity and parental leave benefits and provide a one-time cash bonus for eligible associates of up to $1,000." In a press release, Walmart attributed the new policies to the Republican tax reform bill that passed in December and asserted that "associates in the U.S. will share in tax savings." Here's what you need to know.
Republicans Are Framing This As A 'Huge Tax Cut Win'
In Walmart's announcement about the raises, bonuses and benefits, the company's president and CEO said, "Tax reform gives us the opportunity to be more competitive globally and to accelerate plans for the U.S." Similarly, the Republican National Committee called Walmart's changes "Today's HUGE tax cut WIN" in a tweet.
The Overall Cost Of The New Benefits Is A Fraction Of Walmart's Projected Tax Savings
Walmart says that raising wages will cost $300 million per year and that the bonuses will cost another $400 million. (It didn't announce how much its expanded parental leave and adoption benefits will cost.) These costs represent a small fraction of Walmart's projected tax savings under the Republican tax plan over the next decade.
In fiscal year 2017, Walmart had pre-tax profits of about $20.5 billion and paid an effective federal tax rate of around 30 percent. With a new corporate tax rate of 21 percent, the corporate tax cut is worth at least $1.85 billion to Walmart every year. Since this cut is permanent, the true benefits to Walmart will grow much larger over time. But it's safe to say that, over 10 years, this corporate tax cut will be worth over $18 billion to Walmart.
This Will Be The Third Wage-Floor Increase Walmart Has Instituted In Three Years
Walmart raised its minimum wage to $9 per hour in April 2015 and again to $10 per hour in February 2016. The repeated wage floor increases have helped Walmart stay competitive with Target and keep up with new minimum wage laws in a number of states.
Rival retailer Target Corp raised its minimum wage to $11 in September, and said it would raise its minimum wage to $15 by 2020.
Walmart and Target's new minimum wage levels exceed the state minimum wage, in all but three states, according to a research note from financial services firm BTIG. Eighteen U.S. states increased their minimum wage on Jan. 1 but the federal minimum wage has been $7.25 since 2009.
[Reuters]
Most Employees Who Get A Bonus Will Receive Less Than $1,000
Walmart's bonuses will be tiered based on how long an employee has worked for the company. Only a very select group — employees who have worked at Walmart for more than 20 years — will receive $1,000. Everyone else will receive $200 to $750.
In an interview, Walmart spokesman Blake Jackson explained to Splinter that the other bonus tiers are as follows, based on tenure as of Jan. 31, 2017:
0-2 years: $200
2-4 years: $250
5-9 years: $300
10-14 years: $400
15-19 years: $750
20 years and up: $1,000
[Splinter]
Walmart Has Simultaneously Closed Many Sam's Club Outlets Without Warning
While announcing the raises and bonuses, Walmart quietly closed several Sam's Clubs across the country. (Sam's Club is owned by Walmart, and Walmart says that Sam's Club workers will also begin earning at least $11 per hour next month.)
Closures were reported by local media in Texas, New York, New Jersey, Indiana, Arizona, Alaska, and elsewhere.
In some cases, employees were not informed of the closures prior to showing up to work on Thursday.
Instead, they learned that their store would be closing when they found the store's doors locked and a notice announcing the closure, according to reports.
In a tweet, Sam's Club attributed the unannounced closures to "strategy."
Employees Have Lobbied Walmart For Higher Wages And Better Conditions For Years
Activist workers have pressured Walmart for years for better pay and working conditions using tactics like Black Friday strikes. The notoriously anti-union company has been accused of closing stores and illegally punishing workers in retaliation for protests, as The Atlantic detailed in 2015:
Walmart maintains a steady drumbeat of anti-union information at its more than 4,000 U.S. stores, requiring new hires—there are hundreds of thousands each year—to watch a video that derides organized labor. Indeed, Walmart's anti-union campaign goes back decades
Tensions have risen between the retailer and OUR Walmart in recent years, with the labor group organizing nationwide protests outside hundreds of stores each Black Friday. The National Labor Relations Board issued a complaint in January of last year, accusing Walmart of illegally firing 19 OUR Walmart members and illegally disciplining more than 40 others after strikes and protests demanding higher pay. Walmart maintains that the firings and disciplining were legal and not in retaliation for protesting.