Walmart Gives 500,000 Workers A Raise

WASHINGTON -- In a move that could alter the minimum wage debate and improve the image of the world's largest retailer, Walmart announced it will raise the baseline wage of its current store employees to $10 per hour, bringing pay hikes to an estimated 500,000 workers.

The company said in an announcement on Thursday that it would raise its wage floor to $9 in April, followed by a second boost to $10 by next February.

The decision follows similar moves by other major retailers such as Gap and IKEA, but the sheer size of Walmart sets the company apart. The Arkansas-based retailer is the largest private-sector employer in the U.S., with an estimated 1.4 million employees, and it is largely seen as a trend-setter in the retail industry.

On a quarterly earnings call aligned with the announcement, Doug McMillon, the company's CEO, said raising wages would be good for both employees and customers.

"Overall, these are strategic investments in our people to reignite the sense of ownership they have in our stores," McMillon said. "As a result, we firmly believe that our customers will benefit from a better store experience, which can drive higher sales and returns for our shareholders over time."

According to a Walmart spokesman, the new wage floors will apply to current employees. New hires next year will be earning at least $9, but will be bumped up to at least $10 per hour after roughly six months of training.

Walmart has long been saddled with a reputation as a low-wage employer, and its battles with labor unions -- in particular the United Food and Commercial Workers union -- stretch back decades. In recent years, labor groups have organized high-profile worker strikes to coincide with the company's Black Friday shopping events, pillorying the retailer over its pay practices.

The across-the-board pay hikes should help rehabilitate that image. They will probably also help Walmart improve customer service in its stores. Over the past two years, bare shelves in Walmart supercenters have become a common sight. A report from a research firm last year traced the troubles in part to a lack of investment in the company's labor.

The pay hikes could also help lawmakers in Congress pushing to raise the federal minimum wage, which has remained at $7.25 per hour since 2009. Democrats have proposed hiking the wage floor to $10.10 per hour and tying it to an inflation index, but Republicans in both chambers have blocked the measure from moving forward.

The proposal is extremely popular among Americans in general, polling with broad approval that crosses party lines. The decision by Walmart could make Republicans look even more out-of-touch.

With Congress gridlocked, many states have moved ahead with raises to their own minimum wages, with a slate of ballot measures passing in the November elections. For the first time ever, a majority of states now have a higher minimum wage than the federal level.