El Diario: Walmart Announces Job Improvements “Driven by Tax Reform”

By Ana B. Nieto on El Diario

Google Translation:

Citing the recent tax reform, which brings a sharp reduction in corporate taxes, Walmart on Thursday announced an improvement in working conditions that offers more than one million workers per hour and that resemble those who have left. offering in previous years. On the same day, the company began to close some Sam’s Club centers, calling into question the viability of thousands of jobs.

The large commercial chain will raise the minimum wage it pays to its employees, which will go from $9/ $10 to $11 starting in February.

Additionally, the company will pay a bonus that depends on the worker’s seniority – which can reach a maximum of $1,000 – and reinforces the maternity and paternity leave (with 10 and six weeks respectively) for full-time employees. This permit extends for six weeks to the employees and in addition a grant is granted in case of adoption of $5,000 to all employees.

“The tax reform,” Doug McMillon, president of the company, said in a statement, “gives us the opportunity to be more competitive globally and accelerate plans for the US.” Walmart explains that it is analyzing the financial benefits of the tax reform to make more investments.

The fact is that Walmart has been raising its wages before the tax reform, the last time in January 2016 and this latest increase comes after another competitor, Target, did it months before. Costco has been paying more than $13 an hour for more than a year.

In addition to having to deal with the bar that the competition has raised, the increase not only coincides with the new fiscal law but also with the entry into force in many states and cities of a gradual increase in their minimum wages. Since January 1 in many and populous states is paid over $10 an hour and widens the gap with the federal minimum that stalled at $7.25 since 2009.

From California to NY

California has a minimum wage of $11 an hour and in New York there are several minimums (depending on counties and number of employees) but all higher than $10. In Washington, Rhode Island, Hawaii, Colorado and Arizona, salaries of more than $10 an hour from January 1 are also due to be paid starting this year. Next year, more increases are planned.

The salary improvement also comes after years of economic recovery that have been reflected in the company’s contribution, which is about 135% higher than it had before the recession (in 2007). It is an improvement that many companies have savored, it has been accompanied by a drop in unemployment throughout the country and in all sectors, but which, unlike other occasions, has not come with substantial wage increases.

Positive movements in the pockets of workers is something economists have long been waiting for.

Despite the increase, with $11 an hour a worker who makes 40 hours a week earns less than $23,000 per year , that is to say that still leaves a family of four with only one job below the poverty line and therefore in need of social programs.

According to Walmart’s statement, $300 million will be allocated to the salary increase, a part of what the company will save by lowering the new tax law from 35% to 21%.


In the case of the bonus, the cost to the company is $400 million, but not all employees will receive the highest amount, but a portion. The $1,000 is reserved for those who have been with the company for 20 years. In September 2016, Walmart announced a bonus for 900,000 workers with a total cost of $200 million.

The announcement of Walmart’s improvements and its association with the tax reform is one of the few made by just a few hundred large companies in the country such as AT & T, American Airlines, Aflac, JetBlue and banks that have made commitments of increases and / or payment of bonus However, some of them have continued to dismiss personnel.

The president of the Patriotic Millionaires group, Morris Pearl, said in a statement that the decision of the companies to give credit to the tax reform for salary improvements is “cynical” . “Companies have been raising salaries even before tax reform in response to a more competitive labor market and pressure from groups like Fight for $15 plus minimum wage increases like in California and New York.” Pearl, who was the managing director of the BlackRock financial institution, said: “We tell those of us who have been inside, these companies do not raise wages because they want to, but because the workers have manifested and demanded more.”

Closures at Sam’s Club

The same day that the new tax law was applauded as beneficial for the job market, closures also began in one of its chain stores: Sam’s Club. Several hundred of the Walmart workers at Sam’s Club will not receive the increase because according to several reports up to a total of 60 stores were closed on Thursday  without prior notice.

This newspaper contacted Walmart to receive confirmation of it but it did not reach the close of the Thursday edition. On Friday, The Wall Street Journal estimated that closures would affect 10% of the total Sam’s Club stores and affect the work of about 10,000 people.

Although there was no press release on this action, on his Twitter account, Sam Club answered some of his clients explaining that after a “complete review of our current portfolio, we have decided to close a series of clubs to align our locations with our strategy. ”

In other tweets, the company talked about converting stores into distribution centers and speculates that part of the work is transferred to these. “Closing clubs is never easy and we are committed to working with affected members and employees during this transition.”

Translated from Spanish. Read the full article, in Spanish on El Diario