Walmart giving employees $1000 bonuses, raising minimum wage

Posted January 12, 2018

Walmart is raising its starting hourly wage from $9 to $11 and expanding its parental leave benefits, the company announced Thursday.

For one, a key competitor, Target, in October raised its minimum wage to $11 per hour, with plans to step it up to $15 by 2020.

Walmart, the favorite target of attacks on the left for exploiting their workforce, will include a one-time cash bonus to eligible employees as high as $1,000, depending on seniority.

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. Salaried employees, who already had 10 weeks paid maternity leave, will receive more paid parental leave.

Walmart said on Thursday it would raise entry-level wages for hourly employees to $11 an hour as it benefits from the biggest overhaul of the USA tax code in 30 years.

The pay increase and bonus will benefit more than 1 million United States hourly workers, it said, but the pay increase remains far below the $15 an hour unions and pressure groups say is needed to make up for decades of low growth in retail wages.

This increase in wages to associates will take effect in February and will be approximately $300 million incremental to what was already included in next fiscal year's plan.

"We think this is a prudent use of tax reform proceeds, as it reinforces the company's commitment to improving in-store service levels and will pressure other retailers to invest more heavily into wages and prices", Ben Bienvenu, an analyst at Stephens, said in a note.

"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 one-time bonus will amount to $400 million in the current fiscal year and the company will take a one-time charge in the fourth-quarter of the current fiscal year to account for the charge. Salaried associates will also get six weeks of paid parental leave.

Walmart said hourly employees at its websites, distribution centers and its Bentonville, Arkansas, headquarters, will benefit from the wage increase. Hourly workers will be paid between $11 and $24.70 an hour.

"A better solution would be to raise the federal minimum wage and not leave it up to corporations", Gould said.

The expanded parental and maternity leave policy will provide full-time hourly associates with 10 weeks of paid maternity leave and six weeks of paid parental leave. Walmart's online business is surging. Walmart itself announced similar $1 minimum wage increases in 2015 and 2016.