Walmart to Raise Starting Hourly Wages to $14 From $12

The federal minimum wage is $7.25 an hour. Twenty states don’t have a minimum wage higher than the federal minimum, which was last raised in 2009, according to the Department of Labor.  

Walmart’s changes, the latest in a series of increases by the company to close the gap with rivals, will push the company’s average hourly wages to over $17.50. Currently hourly workers at Walmart earn an average of around $17, a spokeswoman said. 

The U.S. job market has been tight, with an unemployment rate of 3.5% in December matching multidecade lows. There are signs that the labor market is losing momentum as hiring and wage growth cooled in December, though the number of job openings still far outpaces the number of unemployed people. 

In November, there were 10.46 million unfilled jobs in the U.S., federal data show. Of those, 887,000 were in the retail sector and 1.52 million were in the leisure and hospitality sector—industries that often compete for the same workers. Nearly a quarter of available jobs in the U.S. were in those two lowest-wage sectors, as of the most recent data.

More than half the states in the U.S. are set to lift their minimum wages in the coming year, although due to the tight labor market, employers have in many cases needed to offer pay significantly higher than the legal minimum in order to attract and retain employees.

Average hourly earnings for nonsupervisory retail workers rose 4% from a year earlier to $19.93 in December, according to the Labor Department. Wages rose 5% from a year earlier to $28.07 for private-sector workers not in supervisory roles.

Despite recent layoff announcements at technology and banking giants, the bulk of large U.S. employers such as Walmart continue to confront a tight labor market for some core job types, including store workers and truck drivers. Around 340,000 of Walmart’s 1.6 million U.S. workers will see a raise in their March paychecks related to the change, the spokeswoman said.

Wages have surged for low-wage workers since the pandemic for several reasons, including widespread labor shortages and rising prices for a range of goods and services. Many employers say they had to raise wages last year to recruit and hold on to restaurant servers, hotel housekeepers and retail store clerks. The Federal Reserve has been raising interest rates to tame inflation, including wage gains.

Amazon, which recently announced plans to cut more than 18,000 jobs, mostly in its corporate ranks, said in September that it was increasing average starting pay for its front-line warehouse employees from $18 an hour to more than $19. Target raised starting wages for its hourly workers to $15 last year. Costco raised its U.S. minimum wage to $17 an hour in 2021 and the chain’s hourly minimum is currently at $17.50, said Chief Financial Officer

Richard Galanti

on Tuesday. 

Walmart has a more rural and Southeastern store base compared with some of its U.S. rivals, including Target and Costco. That means more of its 4,600 stores and warehouses are in states such as Texas, Mississippi and Georgia that haven’t adopted higher minimum wages in recent years.

 The increases include a mix of regular annual pay increases Walmart gives to hourly workers as well as “target investments in starting rates for thousands of stores,” the company said in a statement. 

The changes include new higher-paying roles in its autocare centers, expanded benefits as part of its subsidized college degree program for workers and the expansion of a program that trains existing employees to become Walmart truck drivers.

Write to Sarah Nassauer at Sarah.Nassauer@wsj.com

Corrections & Amplifications
Costco Wholesale Corp.’s name was incorrectly given as Costco Warehouse Corp. in an earlier version of this article. (Jan. 24.) Also, the federal minimum wage is $7.25 an hour. An earlier version of this article incorrectly said it was set to increase to $9.50 on July 1. (Jan. 24)