Walmart raises pay in US even as 63 Sam’s Clubs close


Sat, Jan 13, 2018 - Page 10

Wal-Mart Stores Inc on Thursday announced it would raise the minimum wage for US workers to US$11 an hour and pay bonuses, but announced plans to close 63 Sam’s Club stores in the US.

Owned by Walmart, Sam’s Club is a chain of membership-only warehouse stores that offer discounted prices. Up to 12 of the shuttered Sam’s Club stores would be converted into warehouses for e-commerce, the company said in a news release.

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

The new employee benefits would affect more than 1 million employees at Walmart US, Sam’s Club, in e-commerce and other departments, the company 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.

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

American Airlines Group Inc, AT&T Inc and Wells Fargo & Co 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 on early Thursday announced the pay raise and touted the announcement on its Twitter feed with a group of smiling employees giving a thumbs-up gesture. Walmart’s pay hike was also highlighted on Twitter by Ivanka Trump and touted by US Secretary of the Treasury Steven Mnuchin during a White House briefing.

However, the news was soon overshadowed by reports around the country about Sam’s Club.

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

The chain is to close three stores in Indianapolis, Indiana, on Jan. 26, affecting a total of 419 workers, the Indianapolis Star reported.

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

Sam’s Club employees affected by the closures would receive the bonus announced by Walmart on Thursday, 60 days of pay and potentially additional severance.

“We need great people to help lead us into the future and we hope that many of them will stay with the company at either a local store or club,” Sam’s Club president John Furner said. “Change is never easy, but we’re making these decisions as part of running a healthy business.”