In 2021, many businesses began offering higher pay in an effort to attract staff, as the pandemic upended the job market.
But two years later, the nation’s biggest private-sector employer, Walmart Inc.
The Wall Street Journal reported on Thursday that Walmart adjusted its hourly wage structure in July in a way that will give most new hires “the lowest possible hourly wage for that store.” The retail giant’s minimum hourly wage is still $14, but starting pay is higher in some stores, the Journal said.
The Journal reported that Walmart, in documents reviewed by the news outlet, said the revised pay structure would enable retail workers to pivot between different store departments — be it the grocery section or the checkout — without affecting what the company pays them. Previously, some new hires might have made more than others depending on their responsibilities, the Journal said.
“This will allow for better staffing throughout the store,” one of those documents said, according to the Journal.
Walmart did not respond to a request for more information. But analysts at Jefferies said the reported decision by the retailer — which is big enough to set trends across the industry — was an indication that the sizzling job market, and the demands for higher pay and better benefits that have come with it, might be cooling.
“As the largest private employer in U.S., we view this update as an indicator that the labor market is becoming more favorable for employers,” the analysts said in a research note on Thursday. “We believe that WMT is seeing better availability for labor, which gives it the confidence to make this change.”
The analysts also said that the decision on pay indicated that “the labor market tightness is easing more broadly.” And they said it would make Walmart’s labor structure more flexible. Early this year, Walmart announced minimum-wage increases for workers paid by the hour — $14 for store jobs, $15 for Sam’s Club and $16 for fulfillment centers.
The Journal reported the news during a year in which union workers at railroads and at companies like United Parcel Service
Economists have said that higher wages, which businesses have passed on to consumers in the form of higher prices, have been a big driver of inflation. But others have argued that prices are higher because companies, particularly in concentrated industries, can get away with keeping them higher, after three years of shocks to the economy made shoppers more accustomed to big price increases. And they say union demands are, in part, a response to inflation.
Prices have risen more slowly recently, and some analysts have said that the Federal Reserve could probably end its interest-rate hikes, its main weapon against inflation, following the August jobs report released last week.
But others have said that real wage growth — or that which is adjusted for inflation — generally hasn’t kept up with rising prices.
“Real wage growth has been catastrophically bad,” UBS economist Paul Donovan said in July. “Despite low unemployment, workers have not been able to achieve their most basic aim — maintaining living standards. While real wage growth should turn positive as inflation falls, this argues against a structural shift of power from employers to workers.”
Shares of Walmart were largely unchanged after hours on Thursday, after finishing regular trading up 1.2%.