Walmart, the nation’s largest private employer, waded into the bumpy waters of partisan politics Thursday, announcing that it will use some of its savings under the new tax bill to provide wage increases, bonuses and expanded benefits to its hourly workers.
The giant retailer, which faces stiff competition for qualified workers in a tight labor market and pressure from unions to increase wages, said it would raise its minimum starting wage to $11 an hour, from $9. It will also expand maternity and family leave benefits, and give bonuses of up to $1,000 to eligible employees.
By tying its pay increases to the tax break it expects to receive, as other large companies have done in recent weeks, Walmart provided support for claims by the Trump administration and Republicans in Congress that the new tax law will benefit not just the wealthy but also working-class Americans.
But within hours, Walmart had undercut its triumphal message when news leaked that it was closing 63 of its Sam’s Club stores. Sam’s Club, a retail chain offering memberships, was soon trending on Twitter, and labor groups and Senate Democrats seized on the news to question Walmart’s motives and criticize the tax bill as failing to protect low-wage workers.
The United Food and Commercial Workers International Union, which hopes to represent Walmart’s nonunionized workforce, called the wage increase a “public relations stunt” meant to distract from the closings.
Senate Democrats, citing the closings and a $20 billion stock buyback announced last fall, said in a statement: “The real response of companies like Walmart to the Republican tax bill has been to ensure that its already high-paid executives and wealthy shareholders reap the overwhelming benefit, leaving thousands of workers standing in the cold without jobs.”
With more than 1 million hourly workers in the United States, Walmart is a bellwether for compensation in low-wage industry. By citing the new tax plan as an impetus for better wages and benefits, the retailer was bound to become a lightning rod in a fiercely ideological debate.
“They snatched defeat from the jaws of victory,” Scott Galloway, a professor of marketing at New York University’s Stern School of Business, said in an interview. “Walmart made a smart move in increasing wages and investing in human capital. Where they screwed up was politicizing it.”