Walmart Inc. (NYSE: WMT) inches up pre trading session on Thursday as company said in an effort to recruit and keep workers in the competitive domestic labor market, that it will increase the average hourly compensation for staff working in its U.S. stores starting next month.
According to Walmart, the new wage increases would raise the average hourly rate from its current level of $17 to $17.50 and take effect in paychecks issued on March 2. A spokeswoman stated in an email that depending on region, the minimum wage for employees at its U.S. stores may increase by as much as $2 to a range of $14-$19 per hour. They added that roughly 340,000 employees at about 3,000 locations will be eligible.
The bulk of Walmart’s 1.6 million American employees live in rural and semi-urban areas.
The increases, however, still fall short of competitors like Amazon, Costco, and Target, who have been providing a $15 minimum wage since 2021.
The decision by Walmart comes as wage growth in the US slows. According to data released earlier this month, the average hourly wages increase for American employees dropped to 0.3% in December from 0.4% the month before.
The labor market is nonetheless robust, with the unemployment rate reaching a five-decade low of 3.5% in December and the number of opportunities for jobs far surpassing the number of jobless.
This has increased the likelihood that the U.S. Federal Reserve will hike interest rates further, severely taxing household budgets and workers making minimum wage.
The firm said in a statement on Tuesday that the compensation hikes are a combination of standard yearly raises and focused improvements in beginning rates.
Six months after increasing the average pay for pharmacy employees to more than $20 an hour and announcing it will provide more regular and automatic pay boosts as part of a new “progressive compensation model” to combat labor shortages, Walmart announced its next round of pay increases. Truck drivers and employees at distribution centers have already seen salary increases.