Walmart is boosting the minimum hourly wage for its U.S. employees to $11 and dishing out bonuses of up to $1,000, crediting President Trump's tax cut for enabling the move.
The increase for the nation's largest private employer also comes amid political pressure to bolster minimum wages and comes amid a hot streak for the retailer.
The big-box store chain, which has more than 1 million U.S. hourly employees, will reap a windfall from the corporate tax rate cut from 35% to 21%.
The move also comes amid a 17-year low for the U.S. unemployment rate, which has intensified competition for good workers.
“Today, we are building on investments we’ve been making in associates, in their wages and skills development,” Walmart CEO Doug McMillon said in a statement. “It’s our people who make the difference and we appreciate how they work hard to make every day easier for busy families.”
McMillon said Trump's corporate tax cut "gives us the opportunity to be more competitive globally and to accelerate plans for the U.S.”
Walmart's announcement follows a series of similar moves by major corporations that also credited the tax cut with bolstering their businesses.
For example, AT&T and Comcast dished out one-time bonuses of $1,000 to non-management workers, while Wells Fargo and Fifth Third Bancorp boosted base hourly pay to $15.
Economists have argued that one-time bonuses, while significant for workers living paycheck-to-paycheck, are not as meaningful as permanent wage increases. Critics of tax reform have said companies are dishing out bonuses for the sake of good publicity and to curry favor with the White House.
"Wal-Mart would have had to go to at least $11 in many markets in order to retain reliable employees," said University of Michigan business professor Erik Gordon. "The tax cut made it easier for the company to swallow."
But, Gordon said, the move indicates that "the corporate tax cut's touted trickle-down effects that were met with skepticism by critics may be happening."
Walmart's wage increase will take effect in February. Walmart said the one-time bonuses would cost the company $400 million and will be based on length of service. Employees who have worked for at least 20 years will get the full $1,000.
The company is also boosting its paid maternity leave policy for full-time hourly workers to 10 weeks at full pay. Previously, birthing mothers got six to eight weeks at half pay.
Walmart is also increasing its paid leave policy for new fathers and non-birthing mothers to six weeks at full pay for full-time hourly workers. Previously, the company didn't offer any paid leave for them.
The changes in parental leave put salaried and hourly workers on the same footing.
Walmart also said it would offer financial help to full-time hourly and salaried employees who are seeking to adopt children.
The minimum wage increase comes about a year after Walmart hiked hourly pay to at least $10 for most workers.
Twelve states already have minimum wages of at least $10, according to the Economic Policy Institute.
The wage increase comes as Walmart is on a roll. While many traditional retailers have been struggling to keep up with online behemoth Amazon, Walmart has fared better. Walmart's online business is surging.
