Wal-Mart Raises Starting Wage; Gives $400M Bonus to Staff Because of Tax Reform

As a direct result of the booming economy and the Trump tax cuts, Wal-Mart announced they are raising their hourly starting wage to $11 and adding significant bonuses to employees.

In a move that’s also an effort to remain competitive in a tightening labor market – thanks to historic low unemployment rates – they also plan to give one-time bonuses of up to $1,000 based on seniority. The bonuses will total $400 million.

They’re also expanding their maternal leave and paternal leave policies and adding an adoption benefit.

“Tax reform gives us the opportunity to be more competitive globally and to accelerate plans for the U.S.,” Chief Executive Officer Doug McMillon said in the statement.

The move comes three years after Wal-Mart last announced it was raising wages, spending $1 billion in 2015 to lift starting hourly pay to $9 and then to $10 for most workers the following year, Bloomberg reports. The increase cut into profit and was criticized by some longer-tenured employees as unfair to them. Since then, many states have enacted minimum wage laws, meaning that a “sizable group” of its 4,700 U.S. stores already pay $11 an hour, according to spokesman Kory Lundberg.

Walmart has been trying to improve their image in the US, with leftists hurling constant criticism of them about the treatment of their employees. There’s a slight pay gap with their biggest rival, Target, and they think this wage increase should even that out.

The move comes three years after Wal-Mart last announced it was raising wages, spending $1 billion in 2015 to lift starting hourly pay to $9 and then to $10 for most workers the following year. The increase cut into profit and was criticized by some longer-tenured employees as unfair to them. Since then, many states have enacted minimum wage laws, meaning that a “sizable group” of its 4,700 U.S. stores already pay $11 an hour, according to spokesman Kory Lundberg.

It also sends a massive “thank you” to the Trump Administration for lowering their corporate tax rate.

The wage hike follows Target’s October decision to up its minimum hourly wage to $11, which it will further boost to $15 by the end of 2020. Costco Wholesale Corp. and other retail chains like TJX Cos. have also raised wages in recent years.

Wal-Mart’s decision makes it the latest corporate titan to plow expected tax savings into employee payouts. Boeing Co., AT&T Inc. and Wells Fargo & Co. have all made similar announcements in recent weeks. Wal-Mart said it’s “early in the process of assessing potential additional investments” it could make.

Wal-Mart also is coming off a resurgence in same-store sales in recent years, giving it more of a cushion to boost pay. Last quarter, the Bentonville, Arkansas-based company posted its strongest U.S. sales gain in more than eight years.

The one-time bonuses will range from $200 to $1,000, depending on how long workers have been with Wal-Mart. The idea is to reward employees who won’t benefit from the new starting wage.

The company also plans to provide all full-time hourly workers with ten weeks of paid maternity leave and six weeks of paid paternity leave. Parents who adopt children will get the same benefit, plus $5,000 to cover their adoption costs. Parents of newborns would supposedly be covered by the company health insurance.