Walmart has announced it will give pay raises to approximately 500,000 full-time and part-time associates at Walmart U.S. stores and Sam's Clubs in the first half of the current fiscal year.
Starting in April, current and future hourly associates will make $9.00 per hour, or $1.75 above the federal minimum wage. By February 2016, current associates will earn at least $10.00 per hour.
The compensation announcement came as part of $1 billion worth of comprehensive changes to the company’s hiring, training and scheduling programs, as well as to store management structure. The retailer says these changes will give its associates the opportunity to earn higher pay and advance in their careers.
This comes after years of criticism of Walmart’s labor policies, highlighted in the 2005 documentary Walmart: The High Cost of Low Prices. The film presents a negative picture of Walmart's business practices through interviews with former employees, small business owners and footage of Walmart executives.
By realigning its store operational structure, Walmart claims associates can enjoy a closer relationship with their supervisors, and will have more control over their schedules.
Walmart associates already have the opportunity for health-care and 401(k) benefits, sick leave and access to bonus incentive opportunities, discounts and educational programs. These benefits and programs will continue to be available to current and future associates.
As part of the announcement, Walmart and the Walmart Foundation also committed $100 million over five years to help increase the economic mobility for entry level workers by advancing their careers. This initiative is designed to benefit the retail and service industries. The Walmart Foundation will work with other foundations, employers, community colleges and non-profit organizations to address how to better train and advance workers in the retail and adjacent sectors. Today, more than 15 million people, including 7 million women, work in retail.
Walmart is also piloting a new, comprehensive on-boarding and training program to create clearer career pathways for associates, so they can earn more and seek promotions. The company is encouraging associates to continue their education by providing no-cost access for them to complete their high school diploma or GED, as well as free and low-cost college credit to reduce the time and cost of earning a college degree. The skills and training that an associate receives through this program will be transferable outside of Walmart.
Last year, another major brand — IKEA — announced it was raising its average minimum wage in its US stores to $10.76 per hour. The company said the increase will impact approximately half of its US retail workers. Hourly wages will vary based on the cost of living in each store location — a departure from determining wages based on the local competitive situation and is centered on the needs of the employee.
Although raising the minimum wage is still a hot issue in Washington, organizations such as the American Sustainable Business Council (ASBC), which represents over 200,000 businesses across the nation, actively argue that raising the federal minimum wage would be good for business.
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Mike Hower is the founder of Hower Impact — a boutique consultancy delivering best-in-class strategic communication advisory and support for corporate sustainability, ESG and climate tech.
Published Feb 20, 2015 9am EST / 6am PST / 2pm GMT / 3pm CET