Walmart, the nation’s largest private employer, announced Thursday that it would raise wages for 425,000 of its employees in the United States, as large companies face mounting pressure to increase pay for low-wage workers.
The wage increases mean that about half the retailer’s 1.5 million workers in the United States would earn at least $15 an hour, Walmart said.
Company executives said the wage increase, which was disclosed as part of the company’s fourth-quarter earnings announcement, was part of a broader plan to reward and retain employees in the most crucial and fastest-growing parts of its business, focused on online grocery pickup and delivery.
“These are investments in people who are important to our future,” Walmart’s chief executive, Doug McMillon, said.
But Walmart continues to resist calls that it raise its minimum wage for all workers, as its chief rivals have done. Amazon raised its starting wage to $15 an hour in October 2018, while Target made that move last year.
Walmart’s minimum wage remains at $11 an hour for many workers, though some positions start at higher amounts.
The announcement of the wage increases came about a week after McMillon met with President Joe Biden and his top economic advisers to discuss, among other issues, the administration’s interest in raising the national minimum wage to $15 an hour. It is currently $7.25 an hour.
The pandemic has highlighted the essential role of low-wage retail workers and their struggles to make ends meet, even as sales have boomed. Walmart said Thursday that its fourth-quarter revenue hit a record of $151 billion, up 7.3% from a year ago. While some retailers have given temporary wage increases and bonuses to workers during the pandemic, only a few have raised pay permanently.
As the pro-labor Biden administration takes the reins, the issue has provoked an unusual spat in the retail industry, with some companies trying to one-up each other on wages. On Thursday, the grocery chain Kroger released a statement weighing in on Walmart’s pay increase.
“We welcome Walmart’s announcement to bring their average wage up to $15 an hour,” a company spokesperson said. “At Kroger, our average hourly wage has been $15 an hour since 2019. In fact, our average hourly associate rate reaches over $20 an hour when accounting for health care, 401(k) and pensions that so many of our competitors choose not to offer.”
It was a striking move from Kroger, which has faced scrutiny in recent weeks for planning to close stores and lay off workers to protest newly enacted local ordinances in several West Coast cities requiring grocery chains to raise their pay during the pandemic. QFC, whose parent company is Kroger, announced this week it would close two QFC stores in Seattle by April 24.
McMillon, who oversees the world’s largest essential retail workforce, has not been willing to immediately endorse a $15-an-hour-minimum wage at his own company or at the federal level.
At a virtual investor meeting with Wall Street analysts Thursday, McMillon was asked whether the company would eventually raise wages for all its employees to $15 an hour.
McMillon said the $15-an-hour minimum for all workers was an “important target, but it should be paced in a way that is good for the U.S. economy.” McMillon did not elaborate on when or if Walmart would move to a $15 minimum but said the company would “continue to make investments at the right time” in higher wages.
Last month, McMillon, who is chair of the Business Roundtable, a trade group representing large corporations, said that while the federal minimum wage should be increased, Congress also needed to consider “geographic differences” in costs of living and its effect on small business.
United for Respect, an advocacy group for low-wage workers, said in a statement Thursday that it viewed Walmart’s wage announcement “primarily as a public relations move, not a meaningful engagement with the growing momentum around $15/hour nationwide.”
Walmart’s reticence stands in contrast to Amazon’s action. When the online retailer announced its new pay in 2018, the company said it would push for raising the federal minimum wage. It became part of the company’s formal policy positions.
Amazon has been particularly vocal about the issue recently. It has run ads supporting a $15 hourly wage in tech and political newsletters like Protocol and Punchbowl, and in late January it ran a full-page ad in The Washington Post advocating the change.
“We hope other large employers will also make the jump to $15,” Amazon’s founder, Jeff Bezos, said in October. “Now would be a great time.”
Walmart said the wage increases were part of helping workers build a career by paying them more as they moved into managerial roles.
McMillon said the new raises would be geared toward workers who had been with the company for some time and were involved in picking grocery and online orders in its stores, while also making sure the store’s inventory was as up to date as possible, which is key to running a seamless e-commerce business. Last year, the company fulfilled roughly seven times more online orders from its stores than in 2019.
He stressed that, in addition to the higher wages, the company continued to pay tuition for workers to attend certain colleges and provide affordable health care and 401(k) plans.
The company also detailed some of its plans for growth, including building out its network of fulfillment centers and other e-commerce sites in or next to its stores.
“Because of technology, the future of work will be different,” McMillon said. “And we want to prepare our associates for that journey.”
The Seattle Times business staff contributed to this report.