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. Wal-Mart 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 less-favorable 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 Wal-Mart if it is to keep growing its sales.