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Walmart says it pays an average hourly wage that's double the federal minimum

Walmart, the largest U.S. employer, promoted hundreds of thousands of its workers to higher-paying jobs last year — and the average earnings of full-time associates are nearly double the federal minimum wage.

In a 94-page document released late Tuesday, the retail giant for the first time shared compensation details for its hourly workers.

Walmart’s inaugural Environmental, Social, and Governance (ESG) report pulled back the curtain on the inner workings of how it pays, trains and retains its workers. It also showed results from environmental initiatives such as recycling and emission reduction programs.

In fiscal 2019, Walmart said it promoted 215,000 associates in the U.S. to jobs with "more responsibility and higher pay." The average hourly wage of a full-time, hourly associate in Walmart U.S. stores is $14.26.

Breaking that down further, a starting associate makes $11 per hour, up more than 50% from three years ago. The federal minimum wage sits at $7.25 per hour.

While a key department manager at Walmart can earn up to $24.70 per hour, the report said the average total compensation, including wages, benefits, and bonuses, for an hourly field associate at Walmart is $19.31.

Meanwhile, a store manager earns an average of $175,000 per year. About 75% of the store operations management team started as hourly associates.

Like many retailers that employ lots of part-time and seasonal workers, Walmart has grappled with high turnover rates. Yet the report noted that employee departures have dropped by 10%, to their lowest level in five years.

A Walmart associate works at a Walmart Neighborhood Market, Wednesday, April 24, 2019, in Levittown, N.Y. (Photo: AP Photo/Mark Lennihan)

Trust ‘needs to be earned’

In the past, Walmart has taken criticism for not paying its workers enough to sustain themselves. In the wake of the passage of President Donald Trump’s massive tax cut, the company boosted its starting hourly rate to $11, and expanded a range of benefits.

"We’re investing in our associates through wages along with better educational opportunities, benefits and training," wrote Walmart (WMT) CEO Doug McMillon, in the preface of the report.

“Trust seems in short supply" among big businesses and it needs to “be earned,” he added.

Amidst a heated national debate about income inequality — and the role employers should play in mitigating its effects — McMillon said that “people want to see companies doing good in the world, and people want to work for companies they believe in.”

He added: "Business should serve more than just one stakeholder group. It’s not enough to just serve shareholders or just serve customers; rather, the opportunity for businesses and their leadership is to add value for all stakeholders.

Walmart has “felt that way for a long time and we’ve been taking action, but we’re challenging ourselves to make even better choices and do more."

Walmart released its first-ever ESG report providing specifics on compensation.

The impact of technology

Under McMillon's leadership, Walmart launched its in-house training program called the Walmart Academy.

The free academies, located in the back of more than 200 stores, teach associates customer service skills, retail math, and how to use new technology, among other things. Since inception in 2016, around 800,000 associates have completed training at the Academy.

"One of society’s greatest challenges is helping workers gain the skills and knowledge they need to succeed in the jobs of today and prepare for the jobs of tomorrow," the report said.

"Today, millions of jobs are left unfilled as employers struggle to find workers with the skills needed to fill open positions,” Walmart said.

“In the coming decades, growth in automation will likely exacerbate the skill development challenge as technology drives rapid change in the types of jobs available for workers and the capabilities they need to fulfill those roles,” it added.

While amplifying its training offering, Walmart has been aggressive with its expansion of technology that will automate a range of low-level tasks within its fleet of U.S. stores, freeing up its associates to do more specialized work.

The retailer recently announced plans to roll out 1,500 new autonomous floor cleaners, called the "Auto-C," as well as 300 additional shelf scanners dubbed the "Auto-S.”

In addition, 1,200 more FAST Unloaders will automatically scan and sort items from trucks, and 900 more pickup towers are expected to retrieve customers’ online orders.

As technology continues to transform the retail landscape, Walmart said 35,000 of its associates hold roles that didn't exist two years ago. The evolution of its workforce includes new positions involving more personalized customer service, the company said.

According to Walmart, "we’re also providing associates with tools that help them do their jobs such as AI-powered FAST Unloaders that make unloading trucks more efficient, which can enable associates who previously spent large portions of their shifts unloading trucks to learn new skills such as customer service and merchandising.”

Julia La Roche is a finance reporter at Yahoo Finance. Follow her on Twitter.

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