Walmart raising starting wage, offering bonuses after GOP tax bill

Walmart employee Kenneth White left is coached by Shabazz Bonner while using an inventory app during a class at the Walmart Academy at the store in North Bergen N.J

Walmart announced Thursday morning it intends to raise its starting salaries and bolster worker benefits-and the CEO of the much-criticized company credited President Donald Trump's controversial corporate tax cut for the windfall.

Walmart announced Thursday it is raising its starting hourly wage to $11 an hour and providing a one-time bonus ranging from $200 to $1,000 to hourly associates, with larger amounts going to longer-tenured employees.

Currently, Walmart's starting wage is $9, which goes up to $10 once employees complete a training program.

"We are in the early stages of assessing the opportunities tax reform creates for us", president and chief executive officer Doug McMillon said in a statement. The retailer has spent about $2.7 billion to increase wages over the past few years.

Walmart, the world's largest private employer, is boosting its starting salary for US workers to $11 an hour and handing out one-time cash bonuses.

Walmart's tit-for-tat minimum wage battle with Target, ratcheting to $11 an hour for the least experienced workers with likely pressure to move higher, may signal broader gains to come for workers in a tightening USA labor market - a moment politicians and policymakers have been hoping for. In addition to changing its benefit for mothers, the company will begin offering full-time hourly and salaried associates six weeks of paid parental leave, and associates who adopt a child will receive $5,000 in financial assistance.

Chuck Grom analyst at Gordon Haskett Research Advisors said in a note Thursday that not only will the decisions improve morale, which he said will lead to lower turnover and eventually higher sales, but it's also an image boost for Walmart at a time when its image is "already undergoing a significant makeover".

But Target Corp, a main competitor, pushed its entry level wage to $11 last fall and has pledged to hit $15 by the end of 2020.

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Comcast said on December 20, 2017 that it would give $1,000 holiday bonuses to more than 100,000 employees. The one-time bonus payment increases planned spending by an additional $400 million.

Similar to other stores, including Target, Wal-Mart Stores Inc.is capitalizing on the US tax overhaul to stay competitive in a tightening labor market. Large employers also have been under pressure to boost benefits for workers because unemployment rates are at historic lows, allowing job seekers to be pickier.

Walmart said the wage increases would add about $300 million in expenses to its budget for the next fiscal year.

Walmart's expanded benefits will provide for 10 weeks paid maternity leave and six weeks for parental leave.

Several other institutional investors and hedge funds have also made changes to their positions in the company.

"I would've been astounded if they hadn't raised wages", said Thomas Kochan, at professor at MIT's Sloan School of Management.

Labor advocacy groups called the pay increase a "big win" for employees, but said it fell short of providing a living wage in many parts of the country.

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