Walmart Pays Less for Some New Hires

Walmart is paying some new store workers less than it would have three months ago, a sign that employers are seeking to cut labor costs as the once-hot market for hourly staff cools, according to The Wall Street Journal. The change in wage structure for hourly Walmart workers started in mid-July.

The media outlet reported that the retailer’s latest move suggests that the stresses companies are facing in trying to find employees are easing and that they need to find ways to offset those wage increases.

The latest government and private firm data, along with another recent Bureau of Labor Statistics report showing a lower-than-anticipated number of job openings, indeed points to a softening of the labor market. Subsequently, heading into the busy holiday season, employers in the retail sector may not face the same tight market they did last year.

Walmart’s recent revision of its pay structure is a contrast from the retailer’s boast early this year about new investments in store associates through higher wages. “This includes a mixture of associates’ regular annual increases and targeted investments in starting rates for thousands of stores, to ensure we have attractive pay in the markets we operate,” explained John Furner, president and CEO, Walmart U.S., in a January blog post. “We expect these raises will bring our U.S. average hourly wage to more than $17.50. They’ll be reflected in March 2 paychecks.” 

Under Walmart’s new structure, most new hires will earn the lowest possible hourly wage for that store. Reuters reported the change means that store workers, including cashiers, personal shoppers, stockers, self-checkout helpers and associates manning departments such as sporting goods or electronics, will all receive the same hourly starting wages that are paid at the store, instead of the different levels paid previously, Walmart spokeswoman Anne Hatfield said.

The new wage structure won’t change Walmart’s minimum hourly wage of $14 or result in any pay cuts for existing employees, the spokeswoman added.

Walmart said that the change allows workers to move between work groups such as food, registers, stocking or digital fulfillment without pay impacts, according to documents given to some store workers. 

"We can have consistency in staffing across the store, have better customer service and allow for new opportunities for associates to learn things," Hatfield said.

With the news of Walmart trimming its starting wage for some new employees also comes the introduction of generative AI to streamline the retailer’s job functions. Walmart recently launched the My Assistant desktop and mobile app, which the company said aims to free workers from monotonous, repetitive tasks, allowing more time and focus for improving customer and member experiences.

Each week, approximately 230 million customers and members visit Walmart’s more than 10,500 stores and numerous e-commerce websites under 46 banners in 24 countries. The Bentonville, Ark.-based company employs approximately 2.3 million associates worldwide. Walmart U.S. is No. 1 on Progressive Grocer’s 2023 list of the top food and consumables retailers in North America. PG also named the company as one of its Retailers of the Century.