Walmart to pay employee bonuses, boosts minimum wage

Customers shop at a Walmart store in January 2017 in Skokie Illinois

The national unemployment rate at a 17-year low, making it increasingly hard to for companies to attract - and keep - workers.

"After a thorough review of our existing portfolio, we've chose to close a series of clubs and better align our locations with our strategy", the Walmart-owned chain tweeted just after noon.

The world's largest retailer is raising its minimum wage by $1 an hour to $11, expanding maternity and parental leave benefits and paying eligible employees a one-time $1,000 cash bonus.

Wal-Mart's wage hike follows one by Target (TGT), which increased its minimum wage to $11 an hour starting last October.

President Trump said that opposition against tax cuts would create a problem for the opposition in this year's mid-term elections.

The move follows similar announcements from other USA companies offering higher pay and bonuses.

The pay increase may have also been spurred by competition from other retailers, who have announced similar pay boosts of their own.

But low unemployment has meant that retailers have had trouble attracting and keeping talented workers, experts said.

Walmart's efforts in recent years to invest more in stores and its hourly employees is getting high marks from investors as the retailer's financial performance has improved.

The new starting wage is still less than the $15-an-hour wage that labor activists have been campaigning for across the country.

Lately, much of the talk about Walmart's showdown with Amazon.com has centered on the old-school retailer building stronger e-commerce muscles.

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

Additionally, Walmart says it will contribute $5,000 toward the cost of adoption for its workers. The one-time bonus will amount to $400 million in the current fiscal year and the company will take a one-time charge in the fourth-quarter of the current fiscal year to account for the charge.

Walmart said the wage increases would add about $300 million in expenses to its budget for the next fiscal year. It has done well and strengthened its hand in online retail as many other retailers have struggled.

The company also plans to expand its current maternity and parental leave policy for employees in the United States.

Walmart said it has expanded its parental and maternity leave in the USA with 10 weeks of paid maternity leave and six weeks of paid parental leave.

The new maternity-leave policy will not apply to part-time workers, who make up a significant percentage of the company's hourly work force. Salaried associates will also receive six weeks of paid parental leave. The company said they can expect to see benefits kick in as soon as February.

The raise for new employees is modest, but it continues an upward trend. About a dozen banks have said they will raise their minimum wages. In a tight labor market, companies often need to pay more and provide better benefits in order to fill open positions.

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