Sam's Club president and CEO John Furner says, "we will be closing some clubs, and we notified them today". Walmart is also issuing a one-time cash bonus up to $1,000 to eligible employees. White House spokeswoman Sarah Huckabee Sanders later said she would not comment on the Sam's Club closings but that the wage increases were a sign that the tax measures "are having the impact that we had hoped".
The change, which will go into effect in February, raises Walmart's minimum wage from its current level of $10. The conversion of stores to e-commerce sites also illustrates how companies are trying to leverage their store locations to better compete against Amazon as shopping moves online.
The Walmart wage hike, taking minimum pay up from the current US$10 an hour after in-house training, is aimed at helping the company attract workers at a time when the U.S. unemployment rate is at 4.1 per cent, a 17-year low, making it harder to attract and retain minimum wage employees.
The wage increase announced Thursday by Wal-Mart benefits all hourly USA workers within its stores, Sam's Clubs, eCommerce, logistics and home office.
While the new law will create some financial benefit for the company, Walmart is early in the process of assessing potential additional investments.
"Given how low unemployment is, they would have had to hike wages anyway, the tax bill just made that move easier", said Edward Jones analyst Brian Yarborough. "Companies were already raising wages even before the tax cut passed in response to a tight labor market, grassroots pressure from groups like the Fight for $15, and the rush of minimum wage hikes from California to NY". The store pays $12 an hour and offers a 401 (k) account after a staffer has worked for a year, but Rose realizes that may not be enough for many potential workers.
The telecom giant said on December 20, 2017 - the day Congress passed the tax bill - that it would give 200,000 USA employees a $1,000 holiday bonus. This is good news for many workers who have struggled to make ends meet in a weak economy. It is also possible that not many companies will invest the money saved through tax cuts and instead will pass it on to their shareholders.
Retailers, in general, have one of the highest average effective tax rates because a majority of their operations are in the United States.
By raising its own starting wage, Walmart effectively finds a way to retain its own employee talent and attract new workers with its improved benefits package. Target raised its minimum hourly wage to $11 in October, and will raise wages to $15 by the end of 2020, the Associated Press reported. Ninety percent of Americans live within 10 miles of Walmart's 4,700 USA stores, which sell everything from food and clothes to electronics and sports gear. It marks the third such increase by the company since 2015.
Labor group OUR Walmart called Thursday's announcement a "substantial step" but said it still fell short of what all employees need to provide for their families. The benefit, which will be available to full-time hourly and salaried workers, will total $5,000 per child. Up till now, Walmart workers were paid $9 an hour to start and then were bumped up to $10 an hour after they completed their training.
Paid parental leave will also be upped to six weeks.
Walmart is the latest in a long line of companies that have announced some kind of a raise, bonus or increase in benefits following the passage of the 2017 tax bill.