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Business News/ Special Report / Walmart Cuts Starting Pay for Some New Hires
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Walmart Cuts Starting Pay for Some New Hires

wsj

Revised compensation structure will allow for better staffing throughout stores, retailer says.

Walmart Cuts Starting Pay for Some New HiresPremium
Walmart Cuts Starting Pay 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.

The country’s largest private employer changed its wage structure for hourly workers in mid-July, according to documents reviewed by The Wall Street Journal and store workers.

Under the new structure most new hires will make the lowest possible hourly wage for that store. In the past, some new hires, such as those who collect items for online orders, would have made slightly more than other new hires such as cashiers.

Walmart’s minimum hourly wage of $14 remains unchanged and still varies by region, for example starting at $17 in some stores. Existing workers don’t receive pay cuts.

Walmart said the change in pay structure 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.

“This will allow for better staffing throughout the store," said one of the documents. Over 50,000 workers received raises because their pay was below the new minimums, the company said in the documents.

The change in pay structure allows workers to do different jobs across the store, learning new skills to move up in the company, a Walmart spokeswoman said Thursday.

Walmart increased pay for its hourly staff, including lifting its minimum wage, over the last few years as the Covid-19 pandemic made competition fierce between employers for staff in grocery stores, healthcare and other professional settings. The company also shelled out pay increases and bonuses for roles such as truck drivers, areas where there has been a demand for more workers.

The broader U.S. job market is cooling.  Hiring slowed this summer and the national unemployment rate rose in August to 3.8%, up from 3.5% in July—reflecting more Americans seeking work. Workers’ average hourly earnings rose 4.3% in August from a year earlier, well above the prepandemic pace.

Starting pay for salaried workers is falling after wages, especially for people who changed jobs, climbed in recent years. Businesses have become more cautious in their hiring and companies are paying new recruits less than they did earlier this year.

Walmart employs around 1.6 million U.S. workers, most of which work in stores and warehouses. The new wage structure doesn’t reduce wages for current employees, but allows stores to hire new folks at a lower rate, reducing labor costs. It has also pursued other initiatives to reduce labor costs in recent years, including expanding the use of self-checkout in stores and automating or partially automating its warehouses.

For example, some Walmart store workers in the Northeast, a region that typically has wages higher than the national average, started working as online order collectors in stores at around $16 an hour earlier this year. Now those new workers, along with most other new workers, start at $15 an hour under the new structure.

Write to Sarah Nassauer at Sarah.Nassauer@wsj.com

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