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Walmart raises average hourly wage to $15: why, when and who is receiving it?

The retail giant announced a pay increase for 425,000 employees but their hourly minimum wage lags behind competitors like Amazon, Best Buy and Target.

Walmart raises average hourly wage to $15: why, when and who is receiving it?
WALMART - Archivo EUROPA PRESS

On Thursday Walmart announced that they will be introducing company-wide pay increases which will see the average hourly wage reach $15 an hour. It will provide a considerable bump in earning for some staff but critics have pointed out that many employees will still be earning around $11 an hour.

The wage rise will affect around 425,000 workers across the United States, over a quarter of the nationwide workforce, who will now be earning between $13 and $19 an hour. This is enough to see Walmart’s average hourly wage for American store workers surpass $15 per hour for the first time.

This increase will come into effect from 13 March when those on hourly contracts, such a shelf stockers and home delivery operatives, will be moved to the new pay structure. Last year Walmart boosted the wages of 165,000 employees in management roles to a starting rate of $18 per hour.

Why have Walmart raised their wage structure?

In announcing the move, Walmart CEO Doug McMillon praised the retailer’s strong fourth-quarter performance for the wage increase and thanked employees for their efforts throughout a tough year.

“We completed a strong year and a strong Q4 thanks to our amazing associates. They stepped up to serve our customers and members exceptionally well during a busy holiday period in the midst of a pandemic,” said McMillion.

“Our business is strong, and we’re making it even stronger with targeted investments to accelerate growth, including raises for 425,000 associates in frontline roles driving the customer experience.”

CNN estimates that this wage increase will see around half of Walmart employees, roughly 730,000 people, earning at least $15 an hour. But although the average hourly wage will now exceed $15, staff across the country will be earning very different amounts for carrying out very similar roles.

Walmart argue that their approach is “sensitive to geographies”, and that there are “parts of the country where the starting wage should be lower than others”. As such, they have not yet committed to the $15 hourly minimum wage that some other retailers have adopted.

Failure to introduce $15 hourly minimum wage draws criticism

Despite this announcement, Walmart is stilling lagging behind many competitors when it comes to their wage structure. In 2018 Amazon upped its starting wage to $15 an hour, while Target and Best Buy did the same in 2020.

In comparison, Walmart’s payment floor of $11 an hour seems pretty stingy. The announcement was heavily criticised by progressive Senator Bernie Saunders, who described the increase as “a moral outrage”. In a tweet he references the wealth of the Walton family who founded and own the retailer to this day.

 

Sanders has been at the forefront of a movement that could see Walmart forced to up their wage structure again in the years to come. He has been a vocal support of a federal minimum wage of $15 an hour, a huge increase on the $7.25 currently mandated by law. 

It is thought that the covid-19 stimulus package currently being discussed in Congress will include a requirement for companies to implement a $15 an hour minimum wage over the next five years.