As reported by the Wall Street Journal, Walmart is paying some new store workers less than it would have three months ago.
The largest private employer in the U.S. changed its wage structure for hourly workers in mid-July, according to documents reviewed by the Journal and store workers.
Under the new structure, most 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 intact and still varies by region, starting at $17 in some stores. Existing workers did not receive pay cuts.
Walmart said the change in pay structure allows employees to move between work groups such as food, registers, stocking or digital fulfillment without pay impacts, according to documents given to some store workers.
“This will allow for better staffing throughout the store,” said one of the documents. Over 50,000 workers received raises because their pay was below the new minimums, the company said in the documents.
Walmart increased pay for its hourly staff, including lifting its minimum wage, over the past few years with a tight labor market in full effect. 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.
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. Workers’ average hourly earnings rose 4.3% in August from a year earlier, well above the pre-pandemic pace.
WorldatWork’s “2023-24 Salary Budget Survey” found that employers are projecting salary increase budgets to average 4.1% in 2024.
U.S. Economy Adds 187,000 Jobs in August
The U.S. economy added 187,000 jobs in August, slightly above what economists had projected, according the U.S. Labor Department’s jobs report on Friday.
The unemployment rate in August was 3.8%, up significantly from July and the highest since February 2022. The increase in the jobless level case as the labor force participation rate rose to 62.8%, the highest since February 2020, just before the pandemic began.
Average hourly earnings increased 0.2% for the month and 4.3% from a year ago. Both were below respective forecasts of 0.3% and 4.4%, another sign that inflation pressures are easing.
“The U.S. labor market continues to come back to earth but from a very high peak,” said Nick Bunker, head of economic research at the Indeed Hiring Lab, told CNBC. “The labor market was sprinting last year and now it’s getting closer to a marathon pace. A slowdown is welcome; it’s the only way to go the distance.”
Healthcare showed the biggest gain by sector, adding 71,000. Other leaders were leisure and hospitality (40,000), social assistance (26,000) and construction (22,000).
Transportation and warehousing lost 34,000, likely due to the Yellow trucking bankruptcy, and information declined by 15,000.
While the nonfarm payrolls growth continued to defy expectations, previous months’ counts were revised considerably lower.
The July estimate moved down by 30,000 to 157,000. June was revised lower by 80,000 to 105,000, making that the smallest monthly gain since December 2020.
“The broad message here seems to be that we are nearing full employment, with supply and demand coming more into balance,” Bank of America U.S. economist Stephen Juneau said in a client note. “The gains are concentrated in the laggard sectors. The rest of the labor market probably is at full employment.”
Roku Cutting 10% of Staff
Roku announced that it is reducing 10% of its workforce in a restructuring aimed at trimming the streaming platform’s rising expenses, the Wall Street Journal reports.
Roku, which has about 3,600 employees, said it expects to book restructuring charges of $45 million to $65 million related to the job cuts.
The company said it also expects to record impairment charges of $160 million to $200 million, related to ending the use of certain office facilities, and $55 million to $65 million related to removing select existing licensed and produced content from services on its TV streaming platform.
Excluding the restructuring and impairment charges, Roku said it expects its fiscal third-quarter results will top its earlier projections.
The company said it now expects quarterly revenue of $835 million to $875 million, up from a late-July forecast of $815 million, and an adjusted Ebitda loss of $20 million to $40 million, compared with prior guidance of a $50 million deficit.
Union Rejects GM’s Offer of 16% Pay Hike
General Motors Co.’s counteroffer to the United Auto Workers union of a 16% pay raise for the top wage earners in its plants and a 56% hike for newer employees who make less was rejected by the union, Bloomberg News reports.
UAW president Shawn Fain reacted to the proposal by saying it was “insulting.”
The pay raise is slightly higher than what rival Ford Motor Co. offered the union, but is still well short of the 46% raise that would result from the UAW’s opening bid. GM also included $11,000 in inflation protection payments, a shortened period to the top wage and better pay for temporary staff.
GM made the offer with a week to go before the union’s contract with the automaker and rivals Ford and Stellantis NV expires and all companies far apart from Fain’s opening proposal. In addition to a much bigger raise, Fain wants to reinstate guaranteed pensions, cost-of-living allowances and retiree healthcare.
“After refusing to bargain in good faith for the past six weeks, only after having federal labor board charges filed against them, GM has come to the table with an insulting proposal that doesn’t come close to an equitable agreement for America’s autoworkers,” Fain said in a statement. “GM either doesn’t care or isn’t listening when we say we need economic justice. The clock is ticking. Stop wasting our members’ time. Tick tock.”
The GM offer is slightly better than Ford’s proposal, which Fain rejected and said “insults our very worth.”
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