Walmart raises minimum wage, gives bonuses after tax cut

by Ben Pena January 12, 2018, 0:18
Walmart raises minimum wage, gives bonuses after tax cut

Walmart is raising its starting hourly wage from $9 to $11 and expanding its parental leave benefits, the company announced Thursday. The payouts will total some $400 million, the company said.

Walmart's announcement follows a series of similar moves by major corporations that also credited the tax cut with bolstering their businesses.

Wal-Mart is likely to save billions of dollars from the new tax bill.

The move also comes amid a 17-year low for the USA unemployment rate, which has intensified competition for good workers.

Large employers have been under pressure to boost benefits for workers because unemployment rates are at historic lows, allowing job seekers to be pickier.

In assessing potential additional investments made possible by the new tax reform law, Walmart will consider the needs and expectations of associates, customers and shareholders while working within its financial framework of strong, efficient growth; consistent operating discipline; and strategic capital allocation.

"Tax reform gives us the opportunity to be more competitive globally and to accelerate plans for the U.S.", Walmart CEO Doug McMillon said.

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"Tax reform gives us the opportunity to be more competitive globally and to accelerate plans for the USA".

For example, AT&T and Comcast dished out one-time bonuses of $1,000 to non-management workers, while Wells Fargo and Fifth Third Bancorp boosted base hourly pay to $15.

The increase in wages will cost approximately $300 million on top of wage hike plans that had been included in next fiscal year's plans, the company said. As of December, the average pay for full-time workers was $13 an hour.

Workers in Washington D.C. and the states of California, Washington and MA, already earn at least $11 an hour. Walmart on Thursday promised full-time hourly US employees 10 weeks of paid maternity leave and six weeks of paid parental leave. In 2016, it said employees who finished an internal training program would be eligible for $10 an hour. The change is in addition to wage increases already planned for many US markets in the coming fiscal year. Wal-Mart also will pay a one-time cash bonus to eligible employees of as much as $1,000. Workers with more than 20 years of experience will receive the full $1,000; workers with less than two years of experience will receive $200 with various amounts based on service, CNBC reported.

Get the Monitor stories you care about delivered to your inbox. The companies say the bonuses they've announced are a way to share some of their bounty with their workers, though in some cases it's a very small percentage of their gains.

This story was reported by The Associated Press.

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