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Walmart, Citing New Tax Law, Will Raise Starting Wages; Also Closes 63 Sam's Clubs

Jan 11, 2018
Originally published on January 11, 2018 3:01 pm

Updated at 3:30 p.m. ET

Walmart is raising wages for new employees from $10 an hour to $11, expanding paid parental leave and offering a one-time bonus to eligible workers, actions that the company says will affect more than 1 million employees in the U.S.

The changes were announced Thursday. Later the same day, Walmart announced it is closing 63 Sam's Club stores, after "a thorough review of our existing portfolio."

"It didn't say how many workers would be laid off but it said employees of the closed stores were free to reapply for other jobs elsewhere in the company," NPR's Jim Zarroli reports.

Walmart "appeared to tie the pay increase — though not the store closings — to the tax bill passed by Congress last month," Jim notes.

The company said the wage and benefit changes are a way to allow workers to "share in tax savings." The new GOP tax law includes deep cuts in corporate tax rates.

"We are early in the stages of assessing the opportunities tax reform creates for us to invest in our customers and associates and to further strengthen our business, all of which should benefit our shareholders," Walmart president and CEO Doug McMillon said in a statement.

The wage hike comes after several years of Walmart raising the floor on its hourly pay.

Over the past two years, Walmart has raised its starting hourly wages twice, to $9 and then to $10. The federal minimum wage is $7.25.

Last fall, Target raised its minimum hourly wages to $11 and announced plans to eventually raise the rate to $15.

Walmart's new benefits to employees also include a one-time bonus for eligible hourly associates, including part-time workers. The amount will range up to $1,000 for employees who have been with Walmart for at least 20 years.

The company will also expand hourly leave, "providing full-time hourly associates in the U.S. with 10 weeks of paid maternity leave and six weeks of paid parental leave," it says.

Previously, Walmart provided fully paid family leave to salaried workers, while hourly workers received half pay during family leave.

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