Lower taxes and tight labour market prompt Walmart to hike USA wages

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Walmart is boosting its starting salary for US workers to $11 an hour, giving a one-time $1,000 cash bonus to eligible employees and expanding its maternity and parental leave benefits.

The company is offering a one-time bonus to full and part-time employees based on their length of service, rising to $1000 for employees with 20 years of service. It made a similarly splashy announcement back in 2015 about raising its minimum hourly pay amid improving economic conditions.

Wal-Mart said the new tax law will create "some financial benefit for the company" and that is it is in the early process of assessing additional investments.

A note from the company said the starting wage will rise to $11.

"Tax reform gives us the opportunity to be more competitive globally and to accelerate plans for the U.S.", Chief Executive Officer Doug McMillon said in Thursday's statement.

The pay increase and bonus will benefit more than 1 million United States hourly workers, it said, but the pay increase remains far below the $15 an hour unions and pressure groups say is needed to make up for decades of low growth in retail wages.

Walmart is planning to give back a portion of its billions of dollars in savings from new tax legislation to workers - in wages, bonuses and other benefits.

The pay hike at Walmart follows similar actions at rival Target Corp.

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The wage increase announced Thursday by Walmart benefits all hourly USA workers within its stores, Sam's Clubs, eCommerce, logistics and home office. That year, it raised its minimum wage to $9 an hour but later blamed the investment for slipping profits.

The company, with 900 employees at three Lancaster County stores, said the actions were prompted by the recently enacted tax-reform bill.

Walmart employs 2.3 million people worldwide, according to the company. The firm owned 1,608,511 shares of the retailer's stock after selling 591,825 shares during the period.

The one-time bonuses will range from $200 to $1,000, depending on how long workers have been with Wal-Mart.

With this move, the world's largest private employer has scored big points with Republican politicians, who now have a talking point for the campaign trail, and maybe also from shoppers who see its wage increase as socially responsible.

While companies and states have increased salaries in recent years, the $7.25 federal minimum wage has not budged since 2009.

The hike announced today will also increase the average hourly pay for full-time employees to $14.50 from a current $13.85. That irks some economists, who say the federal level has failed to keep up with inflation and productivity.

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