Wal-Mart Says It Will Boost Wages, Give Bonuses With New Savings From Tax Law
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On the same day Walmart announced that it's raising its starting salaries and giving out bonuses, there are reports that it will close dozens of its Sam's Club stores. About that salary boost, Walmart says it'll spend $700 million more on employees and will add to its maternity leave and adoption support programs. The company says it was motivated by a desire to share the benefits of the big new corporate tax cut. NPR's John Ydstie reports there are also some other forces at play.
JOHN YDSTIE, BYLINE: Retailers like Walmart will be among the biggest beneficiaries of the tax overhaul because they tend to pay taxes at a higher rate than other industries. The new tax law slashes the top corporate rate from 35 to 21 percent. That will save Walmart billions of dollars a year. In a statement, the company's president and CEO, Doug McMillon, said the company wanted to invest some of that money in better wages and training for its workers. So Walmart will raise its minimum wage $1 to $11 an hour. It will also give eligible workers bonuses. The bonus could reach a thousand dollars for workers who've been with the company for at least 20 years.
BRYAN WELCH: I think it is a great thing.
YDSTIE: Bryan Welch, a Walmart employee speaking just outside a store in Washington, D.C., says it will make a difference for him.
WELCH: I mean, any time you get a pay increase, considering the original pay - you know, it'll definitely help me catch up on some bills.
YDSTIE: But Welch was skeptical that the tax cut was the company's only motivation.
WELCH: Walmart is trying to improve their training and they're trying to improve their situation so they don't have such a turnover rate.
YDSTIE: Turnover is a huge problem for many retailers. And the challenge of attracting and retaining workers is becoming even greater as U.S. unemployment falls and the supply of available workers shrinks. More competitive challenges for Walmart were evident in other news today. Business Insider reported the company is closing 63 of its Sam's Club stores and laying off thousands of workers. John Ydstie, NPR News, Washington. Transcript provided by NPR, Copyright NPR.