Walmart said Tuesday it will raise its starting wages for store workers in March in a move to recruit and retain workers in a tight retail labor market.
The retail giant said in a memo to employees that it was increasing its minimum wages for store workers to a range of $14 to $19 an hour, up from $12 to $18 an hour.
John Furner, president and chief executive officer of Walmart U.S., said in a note to employees that the wage increases will take a couple of forms. Some will show up with workers' regular annual pay increases, while others will come as higher starting wages at thousands of stores, he said.
Furner, said the increase was meant "to ensure we have attractive pay in the markets we operate." The move would immediately affect about 340,000 of the company's 1.3 million frontline hourly workers in stores across the United States.
The Bentonville-based retailer has also added more college degrees and certificates to its Live Better U education program, Furner said.
"These new options are focused on where our business is headed and will equip associates with skills to unlock new career opportunities," he said.
Live Better U pays all tuition and fees for part- and full-time workers, who are eligible from their first day of employment at Walmart.
In addition, Walmart has created a higher-paying team lead role in its Auto Care Centers.
For years, Walmart has been under pressure from unions, policymakers and activists to raise its wages for workers in its stores. The raises announced Tuesday would increase the average wage across Walmart stores to roughly $17.50 an hour from about $17, although the company's average wage still trails some competitors like Costco.
"We want to make sure we attract the best associates," a Walmart spokesperson, Anne Hatfield, said in an interview.
The raises come amid persistently high inflation, which has been difficult to navigate for low-wage workers whose paychecks are being stretched by the costs of food, fuel and other basic necessities.
Mark Zandi, the chief economist at Moody's Analytics, said he was surprised that Walmart had raised wages "so significantly" given the risks of a recession.
"It suggests that Walmart doesn't think the economy will suffer a recession anytime soon, or that if it does, it will be a short-lived and modest downturn," Zandi said in an email.
The move may also reflect the longer-term challenges that retailers face in retaining workers as baby boomers age out of the workforce and the labor pool shrinks, he said.
Although the raises will ease the inflationary strain on Walmart workers, they may inadvertently prolong the problem broadly by boosting wages across other sectors of the economy.
"Walmart's move to hike their minimum wage may also complicate the Fed's efforts to quell wage pressures and thus inflation," Zandi said, "as the decision may impact wage hikes and price increases in other labor-intensive industries such as health care, hospitality and personal services that the Fed is focused on in its fight against inflation."
Information for this article was contributed by Serenah McKay of the Arkansas Democrat-Gazette and Michael Corkery of The New York Times.