The Wall Street Journal reports that "Walmart is paying some new store workers less than it would have three months ago, a sign that employers are seeking to cut labor costs as the once-hot market for hourly staff cools."
According to the story, "Under the new structure most new hires will make the lowest possible hourly wage for that store. In the past, some new hires, such as those who collect items for online orders, would have made slightly more than other new hires such as cashiers.
"Walmart’s minimum hourly wage of $14 remains unchanged and still varies by region, for example starting at $17 in some stores. Existing workers don’t receive pay cuts.
"Walmart said the change in pay structure allows workers to move between work groups such as food, registers, stocking or digital fulfillment without pay impacts, according to documents given to some store workers."
The story notes that "Walmart increased pay for its hourly staff, including lifting its minimum wage, over the past few years as the Covid-19 pandemic made competition fierce between employers for staff in grocery stores, healthcare and other professional settings. The company also shelled out pay increases and bonuses for roles such as truck drivers, areas where there has been a demand for more workers."
However, "the broader U.S. job market is cooling. Hiring slowed this summer and the national unemployment rate rose in August to 3.8%, up from 3.5% in July—reflecting more Americans seeking work."
- KC's View:
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This shouldn't be a surprise to anyone. As labor's power ebbs, retailers are going to look to find ways to trim staffing costs where possible.
CNBC points out that "Walmart, as the biggest private employer in the U.S. with 1.6 million people, is a closely watched company for economists and industry leaders — including many who have scoured for signs of whether inflation of wages and of merchandise is cooling."
I suspect that folks in the know will see this as a positive sign in terms of reducing inflation, and there will be other companies that will follow in its wake.
