The truth about Walmart's new bonuses

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Walmart, the world's largest private employer, is boosting its starting salary for US workers to $11 an hour, giving a one-time cash bonus of up to $1,000 to eligible employees and expanding its maternity and parental leave benefits.

The company is offering a one-time bonus to all full and part-time employees based on their length of service, rising to $1000 for employees with 20 years of service. Walmart has about 2.1 million employees, which works out to be an average bonus of about $190. Hourly workers will be paid between $11 and $24.70 an hour.

Since Wal-Mart's initial increase starting in 2015, many states have enacted minimum-wage laws, meaning that a "sizable group" of its 4,700 US stores already pay $11 an hour, according to spokesman Kory Lundberg.

CEO Doug McMillon said in prepared statement that recently enacted tax legislation "gives us the opportunity to be more competitive globally and to accelerate plans for the U.S".

"We've seen wage stagnation for many years, so it's super important for lower-wage workers to see their wages rise", said Elise Gould, a senior economist at the Economic Policy Institute.

Walmart says the wage increase benefits all hourly US workers within its stores, including Sam's Club, its website and logistics.

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The move follows last month's U.S. tax code overhaul that cut the corporate rate from 35% to a flat 21%. A total of 18 states have increased minimum pay this year. The retailer says it has spent about $2.7bn to increase wages over the past few years.

The firm's initial post-tax-reform announcement differs from that of competitor Target Corp., which said Tuesday that it would deploy additional cash flow from the tax law to "long-standing capital deployment priorities, including capital investments, dividends and additional share repurchase". About a dozen banks have said they will raise their minimum wages. The Walmart U.S. segment includes its mass merchant concept in the United States operating under the Walmart or Wal-Mart brands, as well as digital retail.

The retailer is also coming off a resurgence in same-store sales in recent years, giving it more of a cushion to boost pay. However, some guiding themes are clear and consistent with how we've been investing - lower prices for customers, better wages and training for associates and investments in the future of our company, including in technology.

In addition, the company is paying bonuses ranging from $200-$1000 for workers who were already making $11 or more.

Before these changes, full-time hourly workers were only eligible for up to eight weeks of paid maternity leave and two weeks for paid parental leave. Parents who adopt kids will get the same benefit, along with $5,000 to help cover the costs.

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