Walmart CEO says the retail giant isn’t raising its minimum wage to $15 per hour to keep ‘ladder of opportunity’


  • Walmart announced it would raise pay for some workers, while maintaining an $11 starting wage.
  • CEO Doug McMillon said the raises would help the company create a “ladder of opportunity.”
  • He added that a $15 minimum wage should be paced in a way that benefits the US economy.
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Walmart announced Thursday that it would raise wages for some workers, while maintaining an $11 starting wage. 

CEO Doug McMillon said the increases were designed to create a “ladder” system for worker promotions at the country’s largest retailer and biggest private-sector employer. The raise, which will bring 425,000 associates’ pay to between $13 and $19 per hour, will go into effect March 13.

“Those people that we’re raising wages for tend to have been with us for a longer period of time than someone that might be earning the entry wage,” McMillon said on a conference call with investors. “We’re trying to … create this ladder of opportunity, providing an opportunity for people when they start with the company to build a career like so many of us already have.”

The company chose not to raise its starting wages, which will stay at $11 per hour despite pressure to raise the minimum pay to $15 per hour. Over the past few years, competitors including Amazon, Target, and Costco have raised their minimum pay to $15 per hour after worker groups and labor advocates called for the increase. Walmart said its average pay in the US was above the $15 per hour threshold.

McMillon said the company would not be able to implement the ladder structure — which is designed to help employees move up through the company —  if a $15 minimum wage went into effect immediately. Though, he said the company, which raised its minimum wage from $9 to $11 in the past five years, planned to continue raising wages over time and would comply with state minimum wages.

McMillon added that the investment would help support Walmart’s new structure, which prioritizes digital sales — a sector that has soared since the coronavirus pandemic started. McMillon has said in the past that he supports efforts to raise the minimum wage above the $7.25, where it has been stuck since 2009. President Joe Biden plans to include the raise in his $1.9 trillion stimulus plan.

Several members of the Democratic Party have also advocated for a “livable wage” and hope to increase the minimum wage to $15 by 2025. The nonpartisan Congressional Budget Office released an analysis this month of the party’s Raise the Wage Act, which found that the pay hike could result in 1.4 million lost jobs. 

“We’re obviously really well aware of what’s happening nationally with this discussion around $15 and think that that’s an important target but also think that that should be paced in a way that’s good for the US economy,” McMillon said. “You can kind of see us as a model, working through how that works, but I’m really excited to raise the wages today for so many people.”

In the fourth quarter of 2020, Walmart’s digital sales surpassed Wall Street expectations three times over as customers looked to shop from home during the pandemic and demand for household goods rose as consumer behavior favored stockpiling, Walmart Chief Financial Officer Brett Biggs said on the call. Walmart recorded nearly $100 billion in sales in its fourth quarter. US sales alone grew by $29 billion.

“This year really fast-forwarded things in terms of customer behavior, and we think the majority of that behavior is going to last,” McMillon said regarding customers’ interest in online shopping.



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