Walmart lays off 200 corporate employees 0:45
(CNN) --
Walmart, the largest private employer in the United States, announced Tuesday that it will raise its minimum wage from $12 to $14 an hour, in a bid to retain store and warehouse workers amid a restricted labor market for lower wage industries.
Walmart has 1.7 million workers in the United States, 94% of whom are hourly employees, according to its latest annual statement of values.
The company hired hundreds of thousands of workers during the covid-19 pandemic to meet strong consumer demand for groceries and other products.
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In many parts of the country, especially in southern states that have not adopted stricter wage laws, Walmart's starting salary is often the local minimum wage.
The company's move is likely to have a ripple effect throughout the service sector.
For decades, Walmart has been the target of criticism from union groups for its low wages, but in recent years it has been increasing pay.
His latest move will close the gap with Amazon, Target, Costco and other rivals.
Amazon and Target have a minimum wage of $15 an hour, while Costco has a starting wage of $17 an hour.
Walmart's wage increase reflects pressure on chains to raise wages in a battle for labor.
Walmart is trying to keep up with rivals, as well as cities and states that have been raising their minimum wages.
The federal minimum wage is $7.25 an hour as of 2009. Washington state has the highest minimum wage in the country at $15.74.
Although dozens of companies, including Walmart, have laid off corporate staff in recent months, the demand for service sector workers remains strong.
Walmart currently has nearly 30,000 store openings listed on its recruitment website.
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The number of job openings stood at 10.5 million in November, according to the most recent report from the Labor Department, a very high level in historical terms and well above the 6 million unemployed people looking for work that month.
There were more than 1 million vacancies in the retail sector.
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"The job market remains competitive, especially at this level. Hourly workers remain hard to find, and companies continue to compete for them by raising wages," Andy Challenger, a senior vice president at the job relocation company, said in an email. Challenger, Gray & Christmas.
Walmart US chief John Furner said in a memo Tuesday that the company's wage increase "will ensure that we have attractive compensation in the markets in which we operate."
The company's move also comes as many low-wage workers need higher pay to cope with rising costs of food, housing and other inflationary pressures.
