New York — Wal-Mart, America’s largest private employer, said on Tuesday it would raise the minimum wage from $12 to $14 an hour as it tries to keep warehouse and warehouse workers in a tight labor market for lower-wage industries.
Wal-Mart has 1.7 million workers in the United States, 94% of whom are hourly employees, according to the latest annual securities filing. The company employed hundreds of thousands of workers during the COVID-19 pandemic to meet strong consumer demand for groceries and other goods.
In many areas of the country, especially Southern states that have not adopted higher wage laws, Wal-Mart’s wage is often the local minimum wage. The company’s move is likely to have a ripple effect across the service industry.
Wal-Mart has for decades been the target of criticism from labor groups for low wages, but it has raised wages in recent years. Its latest move will bridge the gap with Amazon, Target, Costco and other competitors. Amazon and Target have a minimum wage of $15, while Costco starts at $17 an hour.
Wal-Mart’s higher wages reflect pressure on the chains to raise wages in a battle for work. Wal-Mart is trying to keep up with competitors as well as cities and states that have been raising the minimum wage. The federal minimum wage has been $7.25 an hour since 2009. Washington state has the highest minimum wage in the country at $15.74.
While dozens of companies, including Walmart, have laid off corporate employees in recent months, demand for service industry workers remains strong. Walmart currently has nearly 30,000 store jobs listed on its career site.
The number of job vacancies reached 10.5 million in November, according to the Labor Department’s latest reading, very high by historical standards and far more than the 6 million unemployed looking for a job that month. There were more than a million jobs in the retail sector.
“The job market remains competitive, especially at this level. Hourly workers are still hard to find, and companies continue to compete for them by increasing wages,” said Andy Challenger, senior vice president at Challenger, Gray. & Christmas, in an email.
John Furner, president of Wal-Mart of America, said on Tuesday at a note The company’s wage increase “will ensure that we receive attractive salaries in the markets in which we operate.”
The company’s move also comes because many lower-wage workers need larger salaries to deal with rising food and housing costs and other inflationary pressures.
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