Walmart Inc., the largest private-sector employer in the U.S., is raising its starting wage 17% after a surge in inflation last year and heightened competition for workers.
The lowest initial wage will jump to $14 an hour from $12 next month, Walmart said in an email January 24. The hourly average will rise to $17.50, up 2.9% from the summer level and 6.7% more than in September 2021.
U.S. consumer prices climbed 6.5% in December from a year earlier.
The increase will “ensure we have attractive pay in the markets we operate,” John Furner, the head of Walmart’s U.S. operations, said January 24 in a message to employees. Depending on the location, starting wages for new workers can range as high as $19.
The Bentonville, Arkansas-based company has been increasing wages and benefits in recent years, as retailers and other low-wage employers struggle to fill jobs. While Walmart’s pay rates often surpass those of discounters such as Dollar General Corp. and Dollar Tree Inc., its compensation for hourly workers typically trails that of rivals such as Target Corp., Costco Wholesale Corp. and Amazon.com Inc.
Walmart shares were up 0.3% to $143.06 in New York trading at 3:17 p.m, January 24. The stock advanced less than 1% in 2023 through the January 23 close, while the S&P 500 gained about 4.7% over the same period.
Applications for U.S. unemployment benefits unexpectedly fell in the week ended January 14, sliding to the lowest level since September 2022. The four-week moving average in initial claims, which smooths out some of the week-to-week volatility, edged down to 206,000, the lowest since mid-May.
Walmart’s increase in wages will be fueled by regular annual pay raises and “targeted investments in starting rates for thousands of stores,” Furner said. The pay bump will be reflected in March 2 paychecks.
Furner said Walmart is creating new, higher-paying team-lead jobs at its automobile-care centers. The company is elevating tech positions at the centers to a higher pay scale “that reflects the special skills needed for the role and its importance to our business.”
Walmart is also adding new college degrees and certificates to its program that pays tuition and fees for employees. Earlier this month, the retailer said it was expanding an initiative to train supply-chain associates as truck drivers who can earn as much as $110,000 in their first year.