Walmart announced Thursday that it will raise the lowest wage it pays to $10 an hour, a development that will factor into federal politics as Democrats continue to push an increase in the federal minimum wage from $7.25 hourly.
The world’s largest retailer, Walmart said that it would raise its starting wage to $9 an hour this April and then to $10 an hour in February of next year.
“There will be no better place in retail to learn, grow, and build a career than Walmart,” wrote Walmart CEO Doug McMillon in a blog post announcing the move.
McMillon said that the pay increase was part of “comprehensive changes to our hiring, training, compensation, and scheduling programs, as well as to our store structure, and these changes will be sustainable over the long term.”
In its earnings report for the fourth quarter of 2014, the company indicated that the move would raise wages for 500,000 employees in the first half of 2015. The total investment in the overhaul of practices will cost the company $1 billion, although it did not break out how much of that would be attributable to higher wages paid.
The $10 minimum would still be below the $10.10 hourly federal minimum wage sought by the Obama administration and congressional Democrats. That proposal, which is not supported by Republicans in the majority in both chambers of Congress, would also tie the minimum wage to inflation, meaning that it would increase in future years.
Nevertheless, Walmart’s decision is sure to be touted by Democrats. Obama administration officials have pressed states, cities, and individual businesses to raise wages while their federal agenda has been blocked by Republicans.
Opponents of raising the minimum wage portrayed Walmart’s decision as a success story of the private sector operating free of interference by the government.
“Like many other retailers, Walmart made its decision based upon what is best for their employees, their customers, their shareholders and the communities in which they operate,” the National Retail Federation said in a statement responding to Walmart’s announcement. The industry group added that “government mandates that arbitrarily require businesses to implement politically driven policy are unnecessary and, in fact, create hurdles to job creation, curtail capital investment and pose as barriers to a sustained economic recovery.”
Average hourly wages for part-time employees will be $10 by April, Walmart claimed, and the corresponding average for full-time employees will be $13.
The company will also raise wages for managers and improve programs for training and promoting employees. McMillon claimed that about 75 percent of Walmart managers joined the company in an hourly role and have been promoted to their current positions.
