A Bloomberg article reported that Wal-Mart Stores Inc. is raising its starting hourly wage to $11.00 and paying additional bonuses up to $1000 to employees based on time and performance with the company.
Wal-Mart, the largest private employer in the United States, is capitalizing on the recent tax cuts in order to stay viable in an increasingly competitive labor market. More specifically, this will close the base wage-gap between the it and long-time competitor Target.
This may be reason for Target workers to seek employment with the nation’s largest retailer as their own company continues to experience a reduction in sales due to its public stance on political issues.
The pay increase, additional to planned annual raises, will be implemented next month at a cost of $300 million and the bonuses will cost $400 million.
In 2015 the huge retailer spent $1billion to fund starting pay to $9 per hour and then to $10 the following year. Back then, the increase plan substantially cut into profits, but this particular pay increase will be offset by the reduction in corporate taxes.
Criticized as, “only benefitting the wealthy”, the tax reform bill has already spawned employee bonus announcements from several large corporations such as AT&T and Bank of America—some of which came out the day after the tax overhaul was signed into law by President Donald Trump.