By Siddharth Cavale
(Reuters) - Walmart Inc on Tuesday said it will raise average hourly wages for its U.S. store workers starting next month, as it seeks to attract and retain employees in a tight domestic labor market.
Walmart's new wage hikes lift its average hourly wage pay to $17.50 from the current $17 an hour and will reflect in March 2 paychecks, the company said. The minimum wage will rise by as much as $2 for staff at its U.S. stores to a range of $14-$19 per hour, depending on location, a spokesperson said in an email, adding that about 340,000 workers at about 3,000 stores will be eligible.
Walmart employs 1.6 million U.S. workers, a majority of whom work in rural and semi-urban areas.
The hikes, however, still lag rivals including Amazon, Costco and Target, which have been offering minimum pay of atleast $15 an hour since 2021.
Walmart's move comes as U.S. wage growth moderates. Data from earlier this month showed average hourly earnings growth for U.S. workers slowed to 0.3% in December, compared with 0.4% in the prior month.
Still, the labor market is resilient with rate of unemployment falling to a 5-decade low of 3.5% in December and number of job openings far outpacing the number of unemployed.
This has raised prospects that the U.S. Federal Reserve could further raise interest rates, putting further strain on minimum wage workers and household budgets.
The wage increases are a combination of regular annual increases and targeted investments in starting rates, the company said in a statement on Tuesday.
Walmart's new round of hikes come six months after it raised the average pay for pharmacy workers to more than $20 per hour and said it would offer more frequent and automatic pay raises as part of a new "progressive wage model" to fight labor shortages. It has previously also raised pay for truck drivers and distribution center workers.
(Reporting by Siddharth Cavale in New York and Uday Sampath in Bengaluru; Editing by Devika Syamnath and David Gregorio)