Walmart raises wages for 425,000 associates, about half of U.S. employees now earn $15 per hour

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Walmart (WMT), the nation’s largest private employer, is raising wages for 425,000 of its nearly 1.5 million employees.

Read more: How to get the most out of your paycheck

“We completed a strong year and a strong Q4 thanks to our amazing associates. They stepped up to serve our customers and members exceptionally well during a busy holiday period in the midst of a pandemic. Change in retail accelerated in 2020. The capabilities we’ve built in previous years put us ahead, and we’re going to stay ahead. Our business is strong, and we’re making it even stronger with targeted investments to accelerate growth, including raises for 425,000 associates in frontline roles driving the customer experience,” Walmart CEO Doug McMillon said in a statement in the retailer’s fourth-quarter earnings results.

In a memo to U.S. associates obtained by Yahoo Finance, U.S. CEO John Furner said the wages for Walmart’s 425,000 store associates in the digital and stocking workgroups would increase to a range of $13 to $19 per hour, depending on location and market. The pay increase will take effect on March 13.

Florida, Miami Beach, Walmart, cashiers, check out . (Photo by: Jeff Greenberg/Education Images/Universal Images Group via Getty Images)
Florida, Miami Beach, Walmart, cashiers, check out . (Photo by: Jeff Greenberg/Education Images/Universal Images Group via Getty Images)

“This is an investment in our people, at the same time we make new investments in our supply chain, automation, and technology,” Furner added.

With Thursday’s pay raise announcement, Walmart now has about 730,000 U.S. store associates, approximately half of its workforce, earning $15 or more per hour.

In September, Walmart raised wages for 165,000 of its hourly associates in its Supercenters. At the time, the retailer said its newly-created "team lead" roles would see a pay range between $18 and $21 an hour with the ability to go up to $30 an hour. Walmart also increased its hourly wage for associates in the deli and bakery areas to $15 or higher and said its hourly auto care center workers would also see a pay increase. Walmart's supply chain associates already earn $15 or more. The company has also invested in higher wages at its membership-only warehouse retailer Sam's Club in recent years.

“Whatever your role, know that we’ll continue to support and invest in you. This is especially true for our hourly associates: 75% of our Walmart management team began as hourly associates, and we’re committed to offering strong wages, valuable benefits, and training and development opportunities that allow someone to grow a career with us,” Furner, who also started as an hourly associate in the garden center in 1993, wrote.

Walmart currently pays an hourly minimum wage of $11 per hour, with the exception of where the minimum starting wage is higher. According to the retailer, the average wage for its U.S. hourly workforce will now be at least $15.25 per hour.

"We will raise our starting wage rate over time," McMillon said at Walmart's Investment Community Meeting on Thursday, noting that Walmart has raised its starting wage by over 50% since 2015 and expanded its benefits for associates.

"And we will be sensitive to geographies. There are parts of the country where the starting wage should be lower than others. And we're obviously really well aware of what's happening nationally with this discussion around $15 and think that that's an important target, but also think that that should be paced in a way that's good for the U.S economy. And you can kind of see us as a model, working through how that works, but I'm really excited to raise the wages today for so many people," McMillon said.

Walmart, the world’s largest retailer, reported fourth-quarter earnings results on Thursday morning. Furner credited the frontline workers as “the reason we’re in such a strong position right now.”

Julia La Roche is a correspondent for Yahoo Finance. Follow her on Twitter.