Wal-Mart to Boost Wages for Most U.S. Store Workers

THE HORROR!

(wallstreetjournal) Wal-Mart Stores Inc. will give nearly all its U.S. hourly store employees—and not just minimum-wage earners—a raise next month, as the nation’s largest private employer tries to combat a tighter labor market and the turnover endemic in the retailing industry.

Wal-Mart previously said it planned to boost its minimum wage in February to $10 an hour. But the giant retailer said Wednesday that hourly workers employed in its stores as of Dec. 31 would get at least a 2% pay bump. The wage increase will affect nearly 1.2 million U.S. employees at the company’s Wal-Mart and Sam’s Club stores.

The across-the-board pay increase is aimed at addressing complaints by some longtime store workers about Wal-Mart’s more-generous starting wages for new hires. The company also is hoping to stem defections and the sums it spends to hire and train new employees. Wal-Mart loses about half a million store workers a year.

Minimum-wage increases took effect in 20 states last year, and several of the biggest employers of hourly workers, including McDonald’s Corp. and Starbucks Corp., have raised their starting pay.

Retail workers in the U.S. earned an average of $14.95 an hour in December, up 3.6% from a year earlier, according to the Bureau of Labor Statistics. With the raises planned for February, average hourly earnings will be $13.38 for Wal-Mart’s full-time store employees and $10.58 for part-time workers, the company said.

Some rivals, including Target Corp., are expected to follow Wal-Mart’s lead, especially in markets where the starting wage is below $10 an hour. “We constantly evaluate our hourly wage rates and adjust based on changing conditions in each market,” a Target spokesman said.

Wal-Mart is in the costly process of trying to improve its 4,600 U.S. stores while also investing heavily to boost e-commerce sales. It has said the wage boost—including the 2% increase for those who earn more than the minimum wage—would cost about $2.7 billion over fiscal years 2016 and 2017, driving down next fiscal year’s profit by as much as 12%. Last week, in a rare retreat, Wal-Mart said it would close 154 stores in the U.S. and another 115 globally, as it weeds out weaker-performing locations.