Walmart raises minimum wage, gives bonuses after tax cut

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The big-box retailer announced Thursday it will be increasing its starting wage rate for hourly employees in the $11, and is expanding maternity and parental leave benefits. A rate of $11 an hour translates to $22,000 a year for a typical 40-hour week, with two weeks of unpaid vacation time.

The big-box store chain, which has more than 1 million USA hourly employees, will reap a windfall from the corporate tax rate cut from 35% to 21%.

Since Wal-Mart's initial increase starting in 2015, many states have enacted minimum-wage laws, meaning that a "sizable group" of its 4,700 US stores already pay $11 an hour, according to spokesman Kory Lundberg.

"Today, we are building on investments we've been making in associates, in their wages and skills development", said Doug McMillon, Walmart president and CEO.

Wal-Mart's announcement follows companies like AT&T Inc, Wells Fargo & Co. and Boeing Co., which have all promised more pay for workers after the Republican-controlled US Congress passed a tax bill that slashed the corporate tax rate to 21 percent from 35 percent.

"We've seen wage stagnation for many years, so it's super important for lower-wage workers to see their wages rise", said Elise Gould, a senior economist at the Economic Policy Institute. And there's more competition from online retailers, which typically pay warehouse employees who pack and ship orders more than stores pay.

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

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Currently, Wal-Mart's starting wage is $9 US until workers complete a training program. But the company also is closing some Sam's Club locations, according to local news reports. The idea is to reward employees who won't benefit from the new starting wage.

A labor group called the higher pay a "substantial step", but said that it still fell short.

Wal-Mart employs about 2.2 million people globally, with more than 1.5 million in the U.S. and had total global revenue of almost $500 billion previous year.

The world's largest private employer, is boosting its starting salary.

Walmart said that the one-time bonus will be given to all eligible full and part-time hourly USA employees. The bonus is based on length of service, with workers with at least 20 years qualifying for $1,000. Walmart has about 2.1 million employees, which works out to be an average bonus of about $190. The new GOP tax law, which President Trump signed late previous year, includes deep cuts in corporate tax rates. The companies say the bonuses they've announced are a way to share some of their bounty with their workers, though in some cases it's a very small percentage of their gains. Most Walmart employees, of course, haven't worked there that long. Previously, the company didn't offer any paid leave for them. Walmart on Thursday promised full-time hourly US employees 10 weeks of paid maternity leave and six weeks of paid parental leave.

One-time payouts are far less valuable to employees than permanent pay raises.