Walmart workers win pay rise after Trump tax cuts

Wal-Mart Stores Inc. will raise the starting wage rate for all of its USA hourly associates to $11, expand maternity and parental leave benefits, and give eligible full- and part-time employees a one-time cash bonus of up to $1,000.

In all, more than 1 million Walmart employees will benefit from the bonuses and wage changes. The retailer has spent about $2.7 billion to increase wages over the past few years.

The starting wage rate increase, which is in addition to wage hikes already slated for many USA markets this coming fiscal year, applies to all US hourly associates, including those who work in stores, Sam's Clubs, the ecommerce division, logistics and the company's home office. The one-time bonus will amount to $400m in the current fiscal year. Employees are also getting a one-time bonus of up to $1,000.

"We are in the early stages of assessing the opportunities tax reform creates for us", President and Chief Executive Officer Doug McMillon said in a statement. The wage increases are expected to cost the retail giant $300 million in what they are already planning for the upcoming fiscal year. (The company now offers six to eight weeks of partially paid maternity leave and no parental leave.) The Bentonville, Arkansas-based company will also offer adoption benefits for $5,000 per child to full-time hourly and salaried employees.

President Trump and his fellow Republicans have argued that the corporate tax cut, part of the biggest overhaul to the United States tax code in 30 years, will benefit workers and lead to more investment by U.S. companies.

McMillon said Trump's corporate tax cut "gives us the opportunity to be more competitive globally and to accelerate plans for the U.S".

Previously, Walmart provided fully paid family leave to salaried workers, while hourly workers received half pay during family leave.

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Walmart said hourly employees at its websites, distribution centers and its Bentonville, Arkansas, headquarters, will benefit from the wage increase.

The changes in parental leave put salaried and hourly workers on the same footing.

Parental leave has been another area in which retailers including Target and Ikea have been trying to offer better benefits.

The company raised its minimum wage to $9 an hour in 2015. As of December, the average pay for full-time workers was $13 an hour.

Lately, much of the talk about Walmart's showdown with Amazon.com has centered on the old-school retailer building stronger e-commerce muscles. The federal minimum wage is $7.25.

Plus, Walmart knows from experience what raising wages can do to help boost business.

(Copyright © 2015. All Rights Reserved.)
 
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