U.S. CEO John Furner said in a memo to workers Thursday that as of March 13, pay for about 425,000 employees out of 1.5 million total in the U.S. would increase to a range of $13 to $19 per hour, depending on location and market. These workers are mostly in roles that support its digital and stocking operations.
The retailing giant, which currently pays its employees an average of $14 an hour, posted weaker-than-expected fourth-quarter earnings early Thursday, but still managed record sales of more than $150 billion. Shares of Walmart were falling 5.9% to $138.45 in early trading Thursday.
The Biden Administration has proposed raising the minimum wage to $15 an hour by 2025 as part of the $1.9 trillion stimulus plan. The current federal minimum wage is $7.25.
Earlier this week, workers at fast-food restaurant chains in 15 cities around the U.S. went on strike demanding an increase in their minimum wage to $15 an hour.
A report by Investopedia in November found that Costco Wholesale (COST) - Get Report paid its workers an average of $17 an hour, with some earning up to $26 per hour. Nordstrom (JWN) - Get Report employees make an average of $16 per hour, while Amazon (AMZN) - Get Report fulfillment center jobs pay a minimum of $15 per hour.
The report also found that Home Depot (HD) - Get Report workers earn an average of $12.69 per hour, though others make upwards of $18 per hour, while employee's at Sam's Club, the warehouse retailer operated by Walmart, earn an average of $12.42 per hour, with some making upwards of $17 per hour.
The $15-an-hour plan has sparked controversy. The Congressional Budget Office estimated that while raising the minimum wage to $15 by 2025 would increase pay for 17 million people and pull 900,000 out of poverty, it would also result in the loss of 1.4 million jobs, as employers cut jobs to make up for higher labor costs.
Earlier this month, Jefferies analyst Corey Tarlowe estimated that the proposed federal minimum wage increase could result in a roughly mid-single digit percentage increase, on average, in total selling, general and administrative (SG&A) costs for dollar store leaders Dollar General (DG) - Get Report and Dollar Tree (DLTR) - Get Report.
However, the analyst said Dollar General has ways it can work around the proposed change, and that its stock is both "well-positioned" and "cheap" compared to competitors such as Walmart and Target.
Tarlowe also said he believes that the dollar stores' initiatives, particularly those of Dollar General, leave them well-positioned to mitigate potential wage-related headwinds.