Second, there are very good reasons for Walmart to increase benefits-even absent the tax cut-because of the labor market circumstances it faces. "Walmart is doing everything they can to become a benefactor of that".
Walmart's move follows similar decisions by companies like AT&T, Comcast and Wells Fargo, each of which either handed out bonuses or raised wages after the newly passed tax plan. In a tight labor market with a 4.1 percent unemployment rate, employers are having a hard time finding workers to fill their openings. "Tax reform gives us the opportunity to be more competitive globally and to accelerate plans for the U.S". Wage growth, which has lagged behind job growth, is now starting to pick up, in part because that unemployment rate is so low.
The retailer is creating a new benefit to assist employees who are adopting a child. Job postings at an Amazon warehouse in OH, for example, offer a starting pay of $14.50 an hour.
"I think all of the recent bonus announcements are PR", said Josh Bivens, director of research at the Economic Policy Institute.
Rising wages reflect a generally tight labor market.
Walmart Stores Inc said on Thursday it would raise entry-level wages for hourly employees to $11 an hour as it benefits from the biggest overhaul of the US tax code in 30 years. But the company also is closing some Sam's Club locations, according to local news reports. And then it closed 63 stores. "In some cases, employees were not informed of the closures prior to showing up to work on Thursday", according to Business Insider.
The wage increase and bonus payment will help the company to even its pay gap with rival Target Corp., which raised its minimum hourly wage for all team members to $11 in October, and has plans to increase its minimum hourly wage to $15 by the end of 2020.
Walmart raises its minimum wage to eleven dollars an hour. Officials said the $1,000 bonus would go to those with 20 or more years of Walmart employment. "Forty percent of American workers get bonuses every year".
Walmart employs about 2.2 million people globally, with more than 1.5 million in the United States, and had total global revenue of almost $500 billion past year.
But the Wal-Mart Stores Inc announcement, its third boost in entry level wages in as many years, is a possible sign wage pressure is building in general, as gains filter down to the lowest-paid jobs and the least-educated workers. It has done well and strengthened its hand in online retail as many other retailers have struggled.
Its proponents argue that it will also benefit workers over time by raising corporate investment and productivity, which affects worker earnings.
Paid parental leave will also be upped to six weeks.
But economists and professors cast doubt on whether tax policy changes were the driving force behind the move by the retailing giant, which for years has stood as a lightning rod for criticism over low worker pay. Ninety percent of Americans live within 10 miles of Walmart's 4,700 USA stores, which sell everything from food and clothes to electronics and sports gear. The adoption benefit may be used to cover adoption costs and provides full-time hourly and salaried employees with $5,000 per adoption.