Walmart Is Finally Giving a Raise to a Half-Million Employees

Finally, a raise.

Photo by Tim Boyle/Getty Images

Usually, earnings reports are about impressing investors. But for the fourth quarter, Walmart geared its announcements toward employees.

Walmart said Thursday that it will raise wages for roughly a half-million full-time and part-time employees at its U.S. stores and Sam’s Clubs over the coming year. By April, Walmart employees will make a minimum of $9 an hour—$1.75 above the federal minimum wage. And by Feb. 1, 2016, that hourly rate will climb to at least $10 for all current employees. The increased pay combined with new worker training initiatives will be a billion-dollar investment for Walmart in the current fiscal year.

Walmart CEO Doug McMillon announced the pay increase in a letter and pre-recorded video released early Thursday morning. The retailer says it is also working to improve its sick-leave policy and benefits, give employees more control over their schedules, and make it easier for employees to advance within the company. “We’re pursuing comprehensive changes to our hiring, training, compensation, and scheduling programs, as well as to our store structure, and these changes will be sustainable over the long term,” McMillon wrote. Walmart has said that its hourly workers make, on average, $11.83 per hour with most of the minimum-wage earners in entry-level positions.

Back in October, Walmart hinted that a move like this was on the horizon when McMillon told reporters, “It is our intention over time that we will be in a situation where we don’t pay minimum wage at all.” The chain has been under significant pressure from labor activists to improve its scheduling and worker policies and to raise wages. Tens of thousands of Walmart employees are thought to be on food stamps nationwide, though Slate has estimated that to pay all its workers a living wage Walmart would have to raise its prices by just 1.4 percent. More than angering labor activists, Walmart’s policies have also hurt its business. The company suffers from high turnover and notoriously bad customer service. Its stores are known for being direly understaffed, chaotic, and disorganized.

The point is that Walmart has taken flak from all sides for its labor policies, which might help to explain the conciliatory tone of McMillon’s taped announcement. “Sometimes we don’t get it all right,” he said. “Sometimes we make policy changes or other decisions and they don’t result in what we thought they were going to. And when we don’t get it right we adjust.” Raising wages a couple dollars for 500,000 employees might not fix everything, but it isn’t a bad way to start.