All the right moves
Wal-Mart Stores Inc. is using the windfall the GOP just gave corporate America to score a public-relations coup with a strategic move that would have been smart even without a tax cut.
The big-box giant said Thursday it will raise its minimum wage in February to $11 per hour and pledged to give one-time bonuses to eligible employees of between $200 and $1,000. WalMart expects its largesse will cost $700 million, but framed it as a way for employees to “share in tax savings” from the tax overhaul that was signed into law in December.
But raising wages is something you could argue Wal-Mart needed to do even in a lessfavorable tax environment.
For one, a key competitor, Target Corp., in October raised its minimum wage to $11 per hour, with plans to step it up to $15 by 2020. With the labor market tight, it’s crucial for Wal-Mart to stay competitive on this measure.
Other policy changes Wal-Mart announced— particularly an expanded parental and maternity leave policy—could further help the retailer attract and retain better workers.
Lately, much of the talk about Wal-Mart’s showdown with Amazon.com Inc. has centered on the old-school retailer building stronger e-commerce muscles. But stores remain a critically important pillar of its ability to thrive in the retailing world of the future. Paying workers more will help ensure those stores are pleasant shopping environments—a necessity for WalMart if it is to keep growing its sales.