Report: Walmart Pay Cuts for New Hires Reflect Cooling Job Market

Walmart has reportedly begun paying some new store workers less than it would have three months ago. This change to the wage structure for hourly workers at the largest private employer in the United States signals a trend among employers to reduce labor costs as the once-hot labor market cools, The Wall Street Journal (WSJ) reported Thursday (Sept. […]

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Walmart has reportedly begun paying some new store workers less than it would have three months ago.

This change to the wage structure for hourly workers at the largest private employer in the United States signals a trend among employers to reduce labor costs as the once-hot labor market cools, The Wall Street Journal (WSJ) reported Thursday (Sept. 7), citing documents it viewed.

Walmart implemented a new wage structure for hourly workers in mid-July, according to the report. Under this structure, most new hires receive the lowest possible hourly wage for their respective store. Previously, certain new hires, such as online order collectors, would have earned slightly higher wages compared to cashiers, for example. Existing employees are not affected by this change.

The retail giant’s minimum hourly wage of $14 remains unchanged, but it still varies by region, with some stores starting at $17, the report said.

Reached for comment by PYMNTS, a Walmart spokesperson provided an emailed statement: “Consistent starting pay results in consistent staffing and better customer service while also creating new opportunities for associates to gain new skills from experience across the store and lay the groundwork for their career regardless of where they start.”

In the documents viewed by WSJ, Walmart said the change in pay structure will allow workers to move between different work groups without experiencing pay impacts, according to the report.

This flexibility is expected to improve staffing throughout the store, ensuring there are enough employees in each department to meet customer demands, the report said. The company also stated that over 50,000 workers received raises because their pay was below the new minimums.

Walmart’s decision to reduce starting pay for new hires reflects the cooling job market, per the report. Hiring has slowed in recent months, and the national unemployment rate rose in August. However, average hourly wages increased during the month while starting pay for salaried workers fell as businesses have become more cautious in their hiring practices.

The company increased pay for its hourly staff, including raising its minimum wage, during the height of the pandemic when competition for workers was intense, according to the report. Additionally, Walmart provided pay increases and bonuses for roles such as truck drivers, where there was a higher demand for workers.

The ADP Research Institute reported Aug. 2 that wage growth slowed in July, with both existing workers and workers who switched jobs seeing the lowest pay increase in two years.

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