Walmart is boosting the minimum hourly wage for its USA employees to $11 and dishing out bonuses of up to $1,000, crediting President Trump's tax cut for enabling the move.
The move also comes amid a 17-year low for the US unemployment rate, which has intensified competition for good workers. Average hourly earnings for production and non-supervisory workers were up 2.3 percent in December from a year earlier, according to Labor Department figures.
The company is offering a one-time bonus to all full and part-time employees based on their length of service, rising to $1000 for employees with 20 years of service.
The pay hike at Walmart follows similar actions at rival Target Corp.
The increase in wages will cost approximately $300m on top of wage hike plans that had been included in next fiscal year's plans, the company said.
The increase for the nation's largest private employer also comes amid political pressure to bolster minimum wages and comes amid a hot streak for the retailer.
Walmart said the wage increase benefits all hourly USA workers at its stores, including Sam's Club.
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The current minimum wage at Walmart is $9 an hour, which was introduced in 2015. A discrete one-time charge will be taken in the fourth quarter of the current year to account for the bonus; qualification will be determined before the end of the month and payments will be paid as quickly as practical thereafter.
Wal-Mart said the new tax law will create "some financial benefit for the company" and that is it is in the early process of assessing additional investments.
"Today, we are building on investments we've been making in associates, in their wages and skills development", Walmart CEO Doug McMillon said in a statement. The strategy paid off over the holidays: Target's store associates fulfilled 70% of its online sales, which helped to dramatically boost online sales compared to past year.
"A fairer and more competitive tax code will give retailers the ability to modernize stores, invest in their workforce and continue to transform the shopping experience for consumers", he continued.
The one-time bonuses will range from $200 to $1,000, depending on how long workers have been with Wal-Mart.
Walmart is also increasing its paid leave policy for new fathers and non-birthing mothers to six weeks at full pay for full-time hourly workers. The new wage increase will take effect in February. That irks some economists, who say the federal level has failed to keep up with inflation and productivity. Costco's starting wage is at least $13 an hour while Target is gradually raising its starting hourly wage to $15 by 2020.