Walmart, the largest private employer in the United States, announced on Thursday that it will give raises to nearly 500,000 workers as part of a $1 billion investment that also includes changes the company says are designed to give workers greater advancement opportunities and more consistent work hours.
The changes come as Walmart faces intense pressure to pay its hourly employees more. The company said it is also focusing on recruiting and retaining workers. Walmart has struggled with disappointing sales for almost two years, and it hopes that taking better care of its employees will lead to greater profits and more satisfied customers.
Walmart seems to be moving past its hallmark of offering low prices to make it stand out in a highly competitive marketplace. The company had previously reduced staffing in stores in an attempt to be more efficient, but its efforts have backfired, with a hit to worker morale and reduced staffing, which meant unkempt stores, ABC News reported.
[quote text_size=”small” author=”– Walmart statement”]
Current and future associates will benefit from this initiative, which ensures that Walmart hourly associates earn at least $1.75 above today’s federal minimum wage, or $9.00 per hour, in April. The following year, by Feb. 1, 2016, current associates will earn at least $10.00 per hour.
Walmart currently has more than 1.3 million workers in the United States. The company said it will pay even the lowest-level workers at least $9 an hour starting in the spring — well above the federal minimum wage of $7.25 — and increase wages to $10 in 2016. Walmart also announced it will work to strengthen the role of “department manager” with a minimum wage of $13 per hour this year and $15 in 2016, giving lower-wage workers a better path to advancement, the New York Times reported.
Walmart said it expects 500,000 workers to receive a raise this year.
As the largest retailer in the world, Walmart’s move will most likely help those who want to increase the federal minimum wage to $10. Efforts to increase the minimum wage have been blocked by lawmakers repeatedly, which has led to many states passing their own laws to set minimum wages above the federal level, TIME reported.