Work at Wal-Mart (WMT), get a raise.
America’s biggest private employer says it is boosting salaries for half a million of its full-time and part-time employees in the first half of this year…and doing it again next year.
All Wal-Mart workers will make at least $9 an hour, which is $1.75 more than the current federal minimum wage. And that goes up to $10 an hour by February 1, 2016.
Yahoo Finance Senior Columnist Michael Santoli thinks Wal-Mart is just reacting to what’s been happening across the country lately.
“It seems like Wal-Mart is being pulled in the direction of trying to increase wages,” he says. “Whether it’s because just the general movement-- you’ve had so many states that have voted in minimum wage increases-- or because they feel they have to do this at this point in the economic cycle and essentially be pro-active about it, as opposed to always being tarred as the company that tries to pay as little as possible.”
Wal-Mart also announcing it’s taking steps to help lower-wage workers advance their careers. CEO Doug McMillion says those initiatives along with the pay hikes will cost $1 billion in the fiscal year.
In addition to today’s wage news, Wal-Mart is also reporting an unadjusted 4th quarter profit of $1.53 per share. Excluding charges for litigation and the closing of stores in Japan, earnings came in at $1.61 per share. The company also says sales at stores open at least a year rose 1.5% in the period.
Santoli notes today’s report is hardly a crystal ball that gives us major insights into the bigger U.S. economic picture.
“It doesn’t say much about the economy except that it was chugging along as expected,” he adds. “Wal-Mart really doesn’t grow a lot faster or slower than the economy, they’re essentially getting their share of it. So it seems like the fourth quarter was a modest OK for consumers. Expectations may have been a little too high going into the holiday based on what people thought was going to be that so-called tax cut from gasoline.”
Plus, Santoli believes there’s a disconnect between what’s happening in the overall economy…and what’s happening in stores such as Wal-Mart.
“With all those new jobs-- almost 3 million in the last year-- it should be a little bit of a tailwind to consumer spending,” he says. “But the issue is they’re not spending much on “stuff” unless it’s a gadget or a phone, so that’s where I think there’s a little bit of a mismatch between the retailers are reporting and the macro numbers.”
More from Yahoo Finance