Walmart Raises Minimum Wages As Worker Shortages Crunch Labor Market
CHICAGO, ILLINOIS - MAY 19: Shopping carts sit in the parking lot of a Walmart store on May 19, 2020 in Chicago, Illinois. Walmart reported a 74% increase in U.S. online sales for the quarter that ended April 30, and a 10% increase in same store sales for the same period as the effects of the coronavirus helped to boost sales.
Scott Olson via Getty Images

Walmart announced on Tuesday that the grocery and retail corporation will increase average wages for many associates as the job market witnesses a persistent shortage of labor supply.

Walmart U.S. CEO John Furner revealed in a memo that the company plans to implement raises in select stores such that rates are more appealing relative to competitors. Average pay for Walmart employees across the nation will now surpass $17.50 per hour.

“Starting next month, we’ll begin investing in higher wages for associates,” Furner wrote. “This includes a mixture of associates’ regular annual increases and targeted investments in starting rates for thousands of stores, to ensure we have attractive pay in the markets we operate.”

Walmart is one of the largest private sector employers in the United States; the company currently has 1.7 million domestic associates, according to the retailer’s website. The firm also announced the expansion of various programs related to education initiatives for employees, including an increase in the number of college degrees for which associates can be reimbursed.

Amazon, another leading private sector employer, likewise unveiled nationwide wage increases toward the end of last year: average hourly pay for employees in customer fulfillment and transportation are slated to increase above $19.00 per hour, with employees earning between $16.00 per hour and $26.00 per hour depending on their position and location in the United States, according to a press release from the e-commerce firm.

The wage increases occur as private and public sector employers struggle to hire. There exist roughly 10.5 million job openings and 5.7 million unemployed individuals across the economy, according to a report from the Bureau of Labor Statistics, reflecting a constrained labor market that has worsened inflationary pressures as firms increase compensation.

Even as unemployment rates continue to decline, labor force participation has not recovered following the lockdown-induced recession: the metric, which tracks the percentage of the working-age population currently employed or searching for a position, fell from 63% in early 2020 to roughly 62% in late 2022, according to data from the Bureau of Labor Statistics. Federal Reserve Chair Jerome Powell has remarked that the workforce “participation gap” is largely a result of “excess retirements” that occurred beyond “what would have been expected from population aging alone,” even as younger cohorts largely return to the job market.

Walmart also revealed incentives meant to help store associates and supply chain employees become certified as truck drivers and earn as much as $110,000 during their first year in the new position. The constrained labor market has indeed contributed to supply chain bottlenecks; the nation is short 80,000 truck drivers, according to data from the American Trucking Association, which noted that the figure could expand to 160,000 drivers by 2030.

Other companies have unveiled moves to automate their operations as the persistent labor shortages disadvantage employers in the job market. McDonald’s recently created a test restaurant in Texas in which customers can use kiosks and a mobile app to grab their orders from a conveyor belt rather than interacting with customer-facing staff, while Chipotle tested a robotic chip maker in a California location.

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