Walmart Announces Pay Increases, Expanded Benefits After Tax Cut

12 January, 2018, 06:23 | Author: Luis Fowler
  • Walmart boosts starting pay closing dozens of Sam's Clubs

Large employers have been under pressure to boost benefits for workers because unemployment rates are at historic lows, allowing job seekers to be pickier.

Walmart announced years ago that it would actively manage its store portfolio as it strives to put a dent in Amazon's dominance online.

"Tax reform gives us the opportunity to be more competitive globally and to accelerate plans for the USA", said the company's CEO, Doug McMillon.

Walmart on Thursday said it will raise entry-level wages for USA hourly employees to $11 an hour in February as it benefits from last month's major corporate tax cut and on the same day said it will shut stores and lay off thousands of workers.

"They raised the minimum wage because they have to", said Mark Zandi, chief economist at Moody's Analytics. "The labor market is tight and getting tighter".

The entry of Walmart into the tax-cut debate accelerates the contentious discussion over how much the tax law, still only weeks old, is truly factoring into these corporate decisions.

Several companies have promised to issue worker bonuses in the wake of the tax bill's passage, and at least a handful have said they will raise salaries and wages as well. Target raised its minimum hourly wage to $11 in October, and will raise wages to $15 by the end of 2020. But experts are more doubtful that there's a connection. The change is in addition to wage increases already planned for many USA markets in the coming fiscal year.

The world's largest retailer said the moves, which also include expanded parental leave benefits, will affect more than a million hourly workers in the U.S.

But it wasn't all good news.

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The announcement comes the same day that Walmart confirmed it is closing 63 Sam's Club warehouse stores across the country. In a tweet, the company said the closures would help "better align" its physical locations with its strategy. "Closing clubs is never easy and we're committed to working with impacted members and associates through this transition".

"Today, we are building on investments we've been making in associates, in their wages and skills development".

Walmart employees are getting a pay bump, and the company says it's courtesy of the corporate tax cut Republicans rushed through Congress past year.

"We want to thank them", Treasury Secretary Steven Mnuchin said of Walmart's decision. The Hs Management Partners Llc holds 3.15 million shares with $245.86M value, down from 3.51M last quarter.

One part of the reform was the reduction of the corporate tax rate, meaning big businesses like Walmart pay less in taxes and keep more for spending at their discretion. In 2016, it said employees who finished an in-house training program would be eligible for $10 an hour. The one-time cash bonuses, meanwhile, will cost the company about $400 million, or about 0.08 percent of its annual revenue. The average wage is $13.18 as of July 31, 2017, according to its website. Korea reported 1.08 million shares.

"We are early in the stages of assessing the opportunities tax reform creates for us to invest in our customers and associates and to further strengthen our business, all of which should benefit our shareholders", McMillon added.

Even with the wage bump, many workers will struggle if they're the sole breadwinner.

White House officials quickly jumped on the news from Walmart to highlight the positive benefits of the tax law.

Eleven dollars an hour equals about $19,000 a year for 34-hour weeks, which Walmart considers full time. A full-time salary of $11 an hour amounts to about $19,000 a year, which is below the national poverty level of $20,420 for a family of three. The payscale for hourly workers will be from $11 to $24.70 per hour. Gems, who lives in Gettysburg, Pennsylvania, said via email that more is needed from the retailer.



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