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Walmart raises pay in US even as it shuts some Sam's Club stores

Walmart raises pay in US even as it shuts some Sam's Club stores

Walmart announced Thursday it will raise the minimum wage for US workers to $11 an hour and pay bonuses, crediting the US tax reform approved in December for making the changes possible.

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12.01.2018 09:18 AM

Walmart announced Thursday it will raise the minimum wage for US workers to $11 an hour and pay bonuses, crediting the US tax reform approved in December for making the changes possible.

But the world's biggest retailer and the biggest private US employer is also shutting some Sam's Clubs stores around the US, the company confirmed.

Owned by Walmart, Sam's Club is a chain of membership-only warehouse stores that offer discounted prices.

In some cases, employees learned of the closures only Thursday when they showed up for work and found the store shut, according to local news reports in Texas and some other states.

The wage increase starting in February elevates base starting pay from the current $9 an hour, and Walmart also said it would pay employees a one-time bonus of up to $1,000, expand parental and maternity leave programs and provide financial assistance to employees adopting children.

The new employee benefits will affect more than one million employees at Walmart US, Sam's Club, in e-commerce and other departments, Walmart said.

Walmart executives said they were able to boost employee benefits following the tax reform, which cut US corporate taxes from 35 to 21 percent.

"We are early in the stages of assessing the opportunities tax reform creates for us to invest in our customers and associates and to further strengthen our business, all of which should benefit our shareholders," Walmart chief executive Doug McMillon said.

The lowest starting pay for Walmart workers previously was $9 an hour, increasing to $10 after 90 days following completion of a training program. But a company spokesman told AFP the starting wage for all workers now will be at least $11.

American Airlines, AT&T and Wells Fargo have been among the companies that have given bonuses or awarded pay increases in recent weeks. 

Skeptics have said these initiatives represent a pittance compared with the profit gains expected from lower tax rates, some of which is expected to go to higher executive pay, shareholder payouts and share buybacks.

Walmart did not immediately respond to queries Thursday about the Sam's Club closures, including on the total number of stores and employees affected.

CNBC reported that Sam's Club planned to close 63 US stores, citing a company spokesman. 

The chain will close three stores in the Indianapolis, Indiana area on January 26, affecting a total of 419 workers, the Indianapolis Star reported.

Other states set to see closures included Arizona, Illinois and Tennessee, according to local news reports. 

Sam's Club confirmed the closures in response to Twitter queries from consumers.

"After a thorough review of our existing portfolio, we've decided to close a series of clubs and better align our locations with our strategy," Sam's Club said on Twitter. "Closing clubs is never easy and we’re committed to working with impacted members and associates through this transition."
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