Walmart Wage Points to Pressure to Raise Wages in the Industry Battle for Labor

CHICAGO, Sept. 2 (Reuters) – Walmart Inc.’s (WMT.N) move on Thursday to give 565,000 workers in its U.S. stores rises by at least $ 1 puts the focus on the tight and competitive labor market industry as the most important holiday shopping season is launched.

Valuing nearly $ 800 billion last year in the U.S. alone, the holidays mark the busiest time of year for stores, as they account for most of their annual sales as people shop on black friday, cyber monday and christmas.

Retailers hire tens of thousands of temporary workers across the country to keep up with crowds of people in stores and online, paying competitive wages and offering benefits. Last year, for example, Target, a big-box rival, provided a coronavirus health plan and paid workers $ 15 an hour, up from $ 13 an hour in 2019.

But the shortage of workers nationwide due to the COVID-19 pandemic worries retailers because they will not have enough workers in stores and warehouses to meet additional online and in-store sales.

“The biggest challenge for retailers going into the holiday season will be how to get sales associates and warehouse workers in a position to meet demand,” said Greg Portell, senior partner at the global consulting practice. of Kearney consumers.

With its third pay rise in the past year, Walmart’s average hourly wage in the United States is now $ 16.40, said John Furner, U.S. chief executive, in a note to staff. The average hourly wage for retailers is $ 14.87, according to the U.S. Bureau of Labor Statistics.

Walmart department workers, food and consumables and merchandise in general will receive the highest wages, starting Sept. 25, Furner said.

“POVERTY SALARIES”

The pay rise was not enough for some workers who have struggled for a long time to get more money.

“When Walmart promotes its average salary to $ 16.40 per hour, it’s distracted by the reality that its business model still depends on poverty wages,” said Cynthia Murray, 65, a 20-year-old Walmart worker of Laurel, Maryland, and member of the United for Respect group work.

Murray called for Walmart’s minimum wage to be raised to at least $ 15 an hour, at a time when workers are at risk of contracting the virus.

However, for others it is not about paying.

In July, Walmart said it would pay 100% of college tuition and booking costs for its associates.

This policy is maintained by 19-year-old Jacob, who is based in Cincinnati, Ohio, while the retailer pays tuition for a correspondence course in business administration at the University of Southern New Hampshire.

“Once I finish college, I plan to find a better job,” said Jacob, who declined to provide his last name for fear of losing his job.

“BACK TO HARNESS”

The news comes days before the national end of federal unemployment benefits, which have been anticipated by employers expecting many people, once scared by COVID, to return to the workforce.

“That’s significant. I mean, if you look at it in percentage terms, it’s not much, but that’s Walmart: they don’t really do it,” said Kenneth Dau-Schmidt, a professor of labor and labor law at Indiana University. , Bloomington. . “Companies are having trouble getting people back into the harness after being away for so long and that’s another sign that the job market is readjusting.”

Even smaller retailers are not immune to the problem. Abt Electronics of Chicago, a well-known name in Illinois, said it has increased the minimum wage by just over 10%.

Workers ’wages and benefits are the most expensive operating cost of many retailers, whose workers have long struggled to get higher wages through unions and organizations, including the struggle for $ 15.

Unions have highlighted this year’s industry pay, an issue that received huge attention after an attempt by Amazon.com Inc. (AMZN.O) workers to organize in a warehouse in Alabama . A Reuters analysis of two decades of wage data showed earlier this year that union workers are getting higher wages.

Walmart, which is not unionized, raised the salary of more than 425,000 digital and media partners earlier this year. It reported Wednesday that it plans to hire 20,000 workers in its supply chain division.

Dollar General (DG.N) said this week that it is looking to hire more workers and truck drivers to whom it offers a $ 5,000 login bonus. Target, Best Buy and other major retailers have not yet announced any holiday pay increases or benefits.

Report by Richa Naidu Edition by Chizu Nomiyama, Ben Klayman, Vanessa O’Connell and Edward Tobin

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