Walmart to raise wages on US tax cuts
US retail giant Walmart will raise entry-level wages for employees to $11 (€9.13) an hour in February as it benefits from last month’s major overhaul of the tax code.
The world’s largest retailer and private employer said it would also offer a one-time cash bonus, based on length of service, of up to $1,000, and expand maternity and parental leave benefits.
The pay increase, Walmart’s third minimum wage increase since 2015, and bonus will benefit more than 1m hourly workers, it said.
Walmart’s announcement follows companies like AT&T, Wells Fargo, and Boeing, which have all promised more pay for workers after Congress passed a tax bill that slashed the corporate tax rate to 21% from 35%.
President Donald Trump and his fellow Republicans have argued that the corporate tax cut, part of the biggest overhaul to the US tax code in 30 years, will benefit workers and lead to more investment by US companies.
Walmart is likely to save billions of dollars from the new tax bill.
Retailers, in general, have one of the highest average effective tax rates because a majority of their operations are in the US.
It will also help the retailer attract workers at a time when the unemployment rate is low — currently 4.1% — and so competition for low-wage workers is rising.
Walmart said the new tax law will create “some financial benefit for the company” and that it is in the early process of assessing additional investments.
“We are in the early stages of assessing the opportunities tax reform creates for us,” said Walmart president and chief executive Doug McMillon.
The tax law gives the retailer an opportunity to be more competitive globally and to accelerate investment plans for the US, he said.
Walmart employs about 2.2m people globally, with more than 1.5m in the US, and had total global revenue of nearly $500bn (€415bn) last year.
The increase in wages will cost approximately $300m on top of wage hike plans that had been included in the next fiscal year’s plans, said the company.
The hike will also increase the average hourly pay at Walmart for full-time employees to $14.50 from a current $13.85. The payscale for hourly workers will be from $11 to $24.70 per hour, the company said.
Reuters
