Walmart Just Announced a $1 Billion Shift in Its Minimum-Wage Policy


Wal-Mart workers are about to earn a living wage.

In its latest earnings report, the world's largest retailer announced on Thursday that, beginning in April, it will raise the pay of all full- and part-time employees to at least $9 an hour, according to Bloomberg News. By February of next year, the company plans to raise its wage-floor to $10 an hour, which is $2.75 higher than the federal minimum wage.

The move, which will raise the wages of more than 500,000 Wal-Mart workers, also comes with a pledged rise in average pay, according to a blog post by Wal-Mart CEO Doug McMillon:

"One of the most immediate changes is that we'll raise our starting pay, and we'll provide opportunities for further raises based on performance. For our current associates, we'll start by raising our entry wage to at least $9 an hour in April, and, by February of next year, all current associates will earn at least $10 an hour. I'm also excited about an innovative program we're launching for future associates that will allow you to join Wal-Mart at $9 an hour or more next year, receive skills-based training for six months, and then be guaranteed at least $10 an hour upon successful completion of that program. We're also strengthening our department manager roles and will raise the starting wage for some of these positions to at least $13 an hour this summer and at least $15 an hour early next year. There will be no better place in retail to learn, grow and build a career than Wal-Mart."

McMillon, who received a $25.6 million pay package last year, stated in an accompanying video that he hopes employees take advantage of the new wages to further their careers at the retailer. "If you work hard, develop new skills and care for others, there should be no limit to what you can do here."

The move will cost Wal-Mart $1 billion a year. What the retailer will bring back in good public relations, however, is inestimable. Wal-Mart has a long history of criticism concerning its policies on worker pay, labor practices and working conditions. According to Bloomberg Businessweek, more than half of the company's hourly workers earn less than $25,000 a year.

The criticism has been accompanied by an increasing number of protests at Wal-Mart locations around the country, with more than 1,600 protests and strikes occurring on Black Friday alone. President Barack Obama, backed by polls finding that most American support an increase in the federal minimum wage, has proposed lifting the wage from $7.25 to $10.10 an hour.

In an interview with the Associated Press about the rise in wages, McMillon said that the retailer also plans to change scheduling processes and add training programs to allow sales staffers to plan careers at the company. "We are trying to create a meritocracy where you can start somewhere and end up just as high as your hard work and your capacity will enable you to go."