After making headlines for store closures last week, discount retailer Wal-Mart (NYSE:WMT) is now in the news for an anticipated wage hike to its employees in U.S. stores. About 1.2 million employees of the chain will benefit from this increase in wages, across both their Wal-Mart as well as Sam’s Club branded stores. The company had earlier made announcements of their intention to increase the minimum wage paid at store locations around the country to USD 10 per hour, effective February this year.
According to data from the Bureau of Labor Statistics, the national average in the retail sector is about USD 14.95 (as of December). This is a higher number than before, brought on in large part, due to hikes in starting wages introduced by major players - McDonald’s and Starbucks.
Wage increases on the anvil
In a bid to stay competitive in an industry faced with a paucity of labor, Wal-Mart has decided to offer increases to the wages their workers at stores around the United States receive. The move is designed to help them manage the employee turnover that has become a hallmark of the retail sector. By doing this, they hope to cut their expenses on constantly having to hire and train new workers. At present, the company loses a staggering total of about half a million workers across stores, a year.
Hikes not to be restricted to minimum wage earners
What may come as a surprise to some, is that this time around, the increase in wages will not benefit just the minimum wage earner. Instead, the retail giant has decided to also offer a hike to all hourly wage earners, something that will see the average full-time employee of the company taking home USD 13.38 for every hour of work they put in. Part-time workers can expect to earn, on an average, about USD 10.58 per hour.
On Wednesday however, Wal-Mart said that those on hourly wages would see a minimum of a 2 percent increase in their earnings, starting Dec 31. This move to make changes for everyone was prompted by long-standing murmurs by those older in the system who have felt, for a while now, that they are a disadvantage because new hires start with better wages when they join.
Investing in other areas too
These modifications come as part of a larger effort by Wal-Mart to invest in training as well as benefits, besides wages. An outlay of USD 2.7 billion has been made towards this two-step plan.