Wal-Mart will give more than $3.8 million in pay increases and bonuses to 3,340 of its Montana workers as part of its plan to raise its starting hourly wage nationwide to $11 in a move that company officials credited to recent tax reforms passed in Congress.
Wal-Mart, the state’s third-largest employer, also said Monday it would provide a one-time cash bonus for $1,000 to eligible associates as it expands its benefits.
“These dollars are coming from the tax savings that the company is realizing from recent legislation,” said Tiffany Wilson, Wal-Mart communications director. “With this new tax savings, we wanted to reward our associates and say thank you for all of their hard work.”
In December, Congress passed a $1.5 trillion tax reform package that provides a deep cut in the corporate rate, from 35 percent to 21 percent. On the individual side, about 80 percent of American households will get tax cuts this year, while about 5 percent will pay more, according to the nonpartisan Tax Policy Center.
The Congressional Budget Office predicts the legislation will add $1.4 trillion to the national debt over the next 10 years.
Wal-Mart says it is also significantly expanding parental leave and adoption benefits for its workers, which it refers to as “associates” in its news release.
The company says more than 3,300 Wal-Mart and Sam’s Club associates in Montana are expected to be eligible for the one-time cash bonus, which is estimated to total $1.2 million and more than 1,700 Wal-Mart and Sam’s Club employees are expected to receive a wage increase, which is estimated to total more than $2.5 million.
Doug McMillon, Wal-Mart president and CEO, said the company was building on investments it has been making in associates, in their wages and skills development.
“It’s our people who make the difference. and we appreciate how they work hard to make every day easier for busy families,” he said in a news release.
Wilson said the company is in the early stages of assessing the opportunities tax reform creates, and to further strengthen “our business.”
Wal-Mart operates 16 stores in Montana – 14 Supercenters and 2 Sam’s Clubs, company officials said. Great Falls has two Wal-Marts and a Sam’s Club.
Wal-Mart’s new average hourly wage for full-time associates in Montana will be $14.15, company officials said. The minimum hourly wage in Montana as of Jan. 1 is $8.15.
Barbara Wagner, chief economist for the Montana Department of Labor and Industry, noted Montana and the rest of the country were experiencing low employment rates and that many companies were in the midst of a worker shortage and scrambling to find employees.
“I would say (wages in) most companies I hear of are going up,” she said.
On Tuesday, state officials said Montana’s unemployment rate was 4.1 percent for December, the same rate as the nation.
Craig Doud, market manager for Wal-Mart for western Montana, and Angela Powell, manager of the Wal-Mart on 10th Avenue South, said workers were more than happy about the news.
“I was ecstatic, the associates are ecstatic,” Doud said. “Everyone is excited about this. It’s a great thing for Walmart.”
Doud said the worker shortage had nothing to do with salary increase or bonuses.
“It was an opportunity to take care of our associates,” he said, adding it came about because of the recent federal tax reform and the company appreciating “what our associates do for us.”
They said the salary increase will start Feb. 17 and appear in paychecks in March.
GOP Sen. Steve Daines heralded the company’s decision in an email.
“It’s simple, tax cuts equal more jobs and bigger paychecks,” he said.
The company said full-time hourly Montana employees, as well as Wal-Mart workers nationwide, will receive expanded parental and adoption benefits, including 10 weeks of paid maternity leave and six weeks of paid parental leave.
Wagner said research indicates that providing paid maternity leave increases worker retention.
The state’s 2017 Labor Day report noted more than 504,500 Montanans had jobs in 2016. It stated the labor force will keep expanding at about 4,500 workers per year, which is not enough to cover the expected job growth 5,500 workers.
The state’s labor force ages 16 to 24 is expected to grow by about 130 people per year through 2026 while the labor force older than 55 is growing by nearly 4,000 people per year.
“Increased employment opportunities and higher wages will naturally provide more incentives for workers to enter the workforce,” the report stated. “Yet, these natural forces will not be enough to maintain normal unemployment rates; additional efforts are needed.”
State government, with about 23,500 employees, is Montana’s top employer, making up 5.26 percent of the total employment workforce of 440,075 and the federal government is second with 12,500 employees, or 2.78 percent, according to 2015 figures in the state’s Comprehensive Annual Financial Report.
The CAFR says Wal-Mart has about 4,500 employees in Montana, or 1 percent of the total workforce.
Alexandria Klapmeier, communications director for the Montana Chamber of Commerce, said the chamber was excited to see Wal-Mart make this investment in Montana.
She noted some companies, such as Boeing, were increasing benefits with workers.
Klapmeier noted the worker shortage in Montana “and anything we can do to improve the workforce, bringing in new workers in or keeping workers, is always a benefit.”