Walmart Inc (WMT.N) on Tuesday said it will increase average hourly wages for its U.S. store workers starting in February, as it aims to attract and retain employees in a tight domestic labor market.
Walmart’s new wage hikes raise its average hourly wage pay to $17.50 from the current $17 an hour and will show in March 2 paychecks, the company said. The minimum wage will increase by as much as $2 for workers at its U.S. stores to a range of $14-$19 per hour, depending on location, a spokesperson said in an email, adding that nearly 340,000 workers at about 3,000 stores will be entitled.
Walmart has 1.6 million U.S. employees, most of whom work in rural and semi-urban areas.
The hikes, however, still trail behind rivals including Amazon (AMZN.O), Target (TGT.N), and Costco (COST.O), which have been giving a minimum pay of at least $15 an hour since 2021.
Walmart’s move occurs as U.S. wage growth moderates. Data from earlier in January showed average hourly earnings growth for U.S. workers declined to 0.3% last month, compared with 0.4% in the previous month.
Still, the labor market is resilient with the rate of unemployment dropping to a 50-year low of 3.5% in December and the number of job vacancies far surpassing the number of unemployed.
This has increased the likelihood that the U.S. Federal Reserve could further hike interest rates, further weighing on minimum wage workers and household budgets.
The wage hikes are a combination of regular annual hikes and targeted investments in starting rates, the company said in a statement on Tuesday.
Walmart’s new round of increases comes six months after it hiked the average pay for pharmacy workers to more than $20 per hour and said it would give more frequent and automatic pay hikes as part of a new “progressive wage model” to combat labor shortages. It has previously also hiked pay for truck drivers and distribution center workers.