Walmart, a multi-million dollar corporation employing 1.3 million United States citizens, announced on Thursday, Feb. 19 the company plans to raise wages to $9 per hour for its 500,000 lowest-level workers.
CEO Doug McMillon wrote a letter to Walmart associates posted on the company’s website announcing the wage increase, which is $1.75 more than the federal minimum wage.
McMillon’s letter also stated the wages, which apply to both Walmart and Sam’s Club employees, will increase to $10 per hour by February 2016.
“In recent years, we’ve had tough economic environments, a rapidly growing company and fundamental shifts in how customers are shopping,” McMillon said. “We also made a few changes aimed at productivity and efficiency that undermined the feeling of ownership some of you have for your business.”
McMillon continued, saying, “When we take a step back, it’s clear to me that one of our highest priorities must be to invest more in our people this year.”
The New York Times reported the company will also create a stronger “department manager” position. The wage for that position will increase to $13 per hour this year, and $15 per hour in 2016.
Additionally, current managers and associates will have to undergo thorough training in product knowledge and customer service, according to Forbes. Newly hired staff members will be expected to complete this training within six months of employment.
McMillon’s letter included an infographic showing other changes the corporation plans to make.
Walmart intends to make schedules more “accessible,” offering some associates fixed schedules every week. Other associates will be offered flexible scheduling options as needed. Additionally, the company will give its employees their schedules two and a half weeks in advance.
The infographic also outlined new benefits, including paid sick leave, “skills building courses” and an updated 401(k) program.
The wage increase results from as a 1.7 percent increase in sales during the fourth quarter of 2014, and the company will cost $1 billion according to Fortune.
Additionally, the increase also mirrors the decreasing unemployment rate, which currently stands at 5.7 percent. Five years ago, the rate was 9.8 percent, according to The New York Times.
In recent years, Walmart has been harshly criticized by labor groups for its low wages and poor hours.
Time reports that in 2013, the corporation was bashed by these groups for placing donation boxes around its stores for its own employees in need of public assistance.
Groups such as Our Walmart, which advocates for Walmart employees, has called for Walmart to pay its lowest-level employees $15 per hour.
However, many Walmart employees argue the wage increase is not enough to support themselves or their families.
Emily Wells, a Walmart associate and member of Our Walmart, told The New York Times, “Walmart can afford to provide the good jobs that Americans need- and that means $15 an hour, full-time, consistent hours and respect for our hard work.”
Wells is only scheduled to work 26 hours per week, and makes $9.50 per hour.
Walmart’s decision to raise their wages has been praised by President Barack Obama, who reportedly sees it as a step forward in increasing the federally mandated minimum wage.
According to The Los Angeles Times, White House Spokesperson Eric Shultz said, “[This] announcement is another example of businesses, along with cities and states, taking action on their own to raise wages for their workers, recognizing that doing so can raise productivity, reduce turnover and improve morale.”
Obama initially began calling for a higher minimum wage in 2013. Since then, 17 states, plus Washington, D.C., have increased their minimum wages above the required $7.25 per hour.
The Obama administration has called on Congress to increase the national minimum wage, but, according to Schultz, “given their recalcitrance on this…we’re going to continue to keep making progress in other ways.”
Editor’s Note: Information from The New York Times, Forbes, Time, Fortune, The Los Angeles Times and Reuters was used in this report.