Wal-Mart Stores Inc. plans
to boost the pay of all its U.S. employees to at least $9 an hour by April, a
raise that will top the federal minimum wage by 24% and take a bite out of the
company’s profit this year. The company said it would raise the pay for those
employees by another dollar an hour by next year. In all, the moves affect some
500,000 full-time and part time employees at Wal-Marts and Sam’s Clubs, about a
third of the company’s 1.4 million U.S. total.
The move by the world’s largest retailer comes as the vast
gulf between the richest Americans and the rest of the country has become a key
political issue for both parties as another presidential election cycle looms.
Wal-Mart, with its low wages and scheduling policies that critics say make it
hard for part-time employees to predict their hours, has long been a flash
point for that debate.
Chief Executive Doug McMillon has for months said Wal-Mart
would soon detach itself
from the official minimum wage, joining retailers like Gap Inc. and Costco Wholesale Corp. that have committed
to paying workers more than federal law requires. Aetna Inc. also said last month that it
would boost the
wages of its lowest-paid workers by as much as a third, to $16 an
hour, to draw better prospects and reduce turnover.
Wal-Mart’s action will raise average full-time worker wages
to $13 an hour, up from nearly $12 an hour, while average part-time workers
will be paid $10 an hour. It wasn’t immediately clear what that would mean for
the other key variable in the income equation—hours—though the company said
scheduling would become more predictable. The gains also may not be enough to
satisfy critics. A group including some Wal-Mart workers had been pushing the
retailer to institute a $15 minimum wage.
While Congress hasn’t voted to boost the federal pay floor
since raising it to $7.25 in 2009, many states and cities have set minimum
wages well above the federal level. Seven states, including California and
Massachusetts, already mandate that all employers pay workers at least $9 an
hour. An eighth state, Minnesota, reaches $9 in August. With states and
companies raising pay floors, relatively few workers earn the federal minimum
wage or less per hour, according to the Labor Department.
The wage announcement came as Wal-Mart reported a relatively
strong holiday season, with sales at its core U.S. business up 1.5%, excluding
newly opened or closed stores, led primarily by getting more shoppers to come
into stores. Customer traffic increased 1.4%, the first quarterly increase in
more than two years, helped by lower gasoline prices. Wal-Mart warned that its
net sales could take a $10 billion hit if foreign-exchange rates remain where
they are. The company said it now expects sales growth of 1% to 2%, down from
its October guidance of 2% to 4% growth.
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