Walmart Workers Get a Raise, but Is That Enough?

The largest private employer in the U.S. will have to do a lot more to appease its critics.

Steven Senne / AP

On Wednesday, Walmart announced that in mid-February, 1.2 million employees at its U.S. stores will be getting a small raise. Hourly wages for full-time Walmart employees will increase from an average of $13 to $13.38 (and for part-time employees, the average wage will go from $10 to $10.58.) Unfortunately, that’s still lower than the average for U.S. retail workers, which according to the Labor Department is $14.95.

The Wall Street Journal reports that the pay increases at America’s largest private employer are an effort to address concerns about new hires getting better pay than long-tenured employees, as well as a way of reducing employee turnover. This is the second round of the multi-stage, wage-raising plan Walmart announced last year.

In 2015, Walmart promised that all of their employees would earn at least $10 by this February. At the time, the move was largely seen as a sign of that the labor market had tightened—unemployment was (and is) steady at 5 percent, making it more difficult for companies to retain low-wage workers. And though the raises aren’t large—it’s not the $15 an hour that advocates have been fighting for—the fact that it was Walmart, a company historically known for underpaying its employees in order to keep prices low, seemed significant in the retail world.

But things have changed in a year. First, the company began cutting employee work hours. Bloomberg reported that Walmart executives were telling store managers to rein in labor costs by making reductions to work schedules (though a spokesperson for Walmart insisted that these cuts were only for over-scheduled workers). More recently, Walmart announced that it would be closing 154 stores in the U.S., which it estimates will affect 10,000 workers.

Walmart’s critics, though, don’t think it’s a coincidence that last year’s raise was followed by moves that hurt the company’s employees. In an email, Jessica Levin, a spokesperson for Making Change at Walmart, a campaign backed by the United Food and Commercial Workers Union, wrote, “After Walmart’s last wage increase stunt, many workers almost immediately saw their hours cut and take-home pay go down. It’s easier to find a unicorn than a Walmart worker who has received a meaningful raise, or hasn’t had their hours cut.”

Still, there’s reason to believe that Walmart isn’t raising wages just for the publicity. For one, its additional labor costs—which this year and next will add up to $2.7 billion—have  investors spooked. Last October, Walmart’s stock had its steepest one-day decline in 25 years when the company released a review earnings outlook that accounted for the increased labor costs and the effects of a strong dollar. Many American retailers are struggling to figure out how to keep shareholders happy and pay people fairly, and, despite the market’s reaction, Walmart’s CEO Doug McMillon maintained that a raise was the right decision. According to one estimate, Walmart can definitely bear raises like this: After all, it’s hard for a company that still makes $3 billion a quarter to say it can’t afford it.

Wages matter, especially when spread across millions of employees. That said, they do seem smaller when put alongside the other ways Walmart deals with its workers. For instance, a BusinessWeek cover story about Walmart’s surveillance of its employees included unsavory details about the company’s hiring Lockheed Martin to gather intelligence on employees who were suspected to be involved in labor activities. Last year, Anonymous leaked one of the company’s training videos, which had a heavy anti-union slant.  Walmart might be paying their workers a little bit more, but it’s a long way from appeasing critics on how it treats their employees overall.