Walmart boosts starting pay, closing dozens of Sam’s Clubs - KWWL - Eastern Iowa Breaking News, Weather, Closings

Walmart boosts starting pay, closing dozens of Sam’s Clubs

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NEW YORK (AP) — Walmart confirmed Thursday that it is closing 10 percent of its Sam’s Club warehouse stores — a move that a union-backed group estimated could cost thousands of jobs — on the same day the company announced that it was boosting its starting salary for U.S. workers and handing out bonuses.

The world’s largest private employer said it was closing 63 of its 660 Sam’s Clubs over the next few weeks, with some shut already. Up to 12 are being converted into distribution centers to handle online orders, the company said late Thursday.

It did not disclose how many people would lose their jobs, but said some workers may be placed at other Walmart locations. Making Change at Walmart, a campaign backed by the United Food and Commercial Workers International Union, estimates that 150 to 160 people work at each Sam’s Club store, meaning the closures could affect about 10,000 people.

Lauren Fitz, 22, said she was at her other job as a church secretary when a colleague texted to say that the Sam’s Club where they both worked in Loveland, Ohio, had closed. Fitz had been pleased earlier to read the news that Walmart was boosting starting salaries and offering bonuses.

“I thought, ‘This is really cool.’ And then to find out that my store is closing,” said Fitz, who said she had worked as a sales associate in the jewelry department for two months. At home, she got a call from her manager and had a letter in the mail saying the store had closed and she could seek employment at another Sam’s Club or Walmart store.

“It was very sudden and very shocking,” Fitz said. “I don’t think our managers had any inkling yesterday. It was a normal shift.”

On Twitter, Sam’s Club responded to people’s queries by saying, “After a thorough review of our existing portfolio, we’ve decided to close a series of clubs and better align our locations with our strategy.”

Local news reports said Sam’s Clubs stores were closing in Texas, California, New Jersey, Ohio, Indiana and Alaska, among other states.

Earlier in the day, Walmart had cited the sweeping Republican tax overhaul that will save it money in announcing the higher hourly wages, one-time bonuses and expanded parental benefits that will affect more than a million hourly workers in the U.S.

President Donald Trump cheered the announcement with a tweet, saying, “Great news, as a result of our TAX CUTS & JOBS ACT!” White House spokeswoman Sarah Huckabee Sanders later said she would not comment on the Sam’s Club closings but that the wage increases were a sign that the tax measures “are having the impact that we had hoped.”

Walmart representatives did not respond to a question about the timing of the dual developments.

“This is nothing but another public relations stunt from Walmart to distract from the reality that they are laying off thousands of workers,” said Randy Parraz, a director of Making Change at Walmart.

Rising wages reflect a generally tight labor market. The conversion of stores to e-commerce sites also illustrates how companies are trying to leverage their store locations to better compete against Amazon as shopping moves online.

Walmart announced years ago that it would actively manage its store portfolio as it strives to put a dent in Amazon’s dominance online. With Thursday’s closing, that strategy is now extending to Sam’s Club.

Online retailers typically pay warehouse employees who pack and ship orders more than store jobs pay. Job postings at an Amazon warehouse in Ohio, for example, offer a starting pay of $14.50 an hour.

“This is about the evolution of retail,” said Michael Mandel, chief economic strategist at the Progressive Policy Institute. “The rise of e-commerce is leading to higher wages.”

Large employers also have been under pressure to boost benefits for workers because unemployment rates are at historic lows, allowing job seekers to be pickier.

But the low unemployment has meant that retailers have had trouble attracting and keeping talented workers, experts said. Walmart employees previously started at $9 an hour, with a rise to $10 after completing a training program. Target had raised its minimum hourly wage to $11 in October, and said it would raise wages to $15 by the end of 2020.

“They raised the minimum wage because they have to,” Mark Zandi, chief economist at Moody’s Analytics, said about Walmart. “The labor market is tight and getting tighter.”

While many department store chains such as Macy’s and Sears are struggling, retailers as a whole are still trying to hire. The retail industry is seeking to fill 711,000 open jobs, the highest on records dating back to 2001, according to government data. The longer those jobs go unfilled, the greater pressure on employers to offer higher wages.

Walmart, which reported annual revenue of nearly $486 billion in the most recent fiscal year, said the wage increases will cost it an additional $300 million in the next fiscal year. The bonuses will cost it about $400 million in this fiscal year, which ends on Jan. 31.

It joins dozens of companies including American Airlines and Bank of America that have announced worker bonuses following the passage of the Republican tax plan that slashed the corporate tax rate from 35 percent to 21 percent. “Tax reform gives us the opportunity to be more competitive globally and to accelerate plans for the U.S.,” Walmart CEO Doug McMillon said Thursday.

The company said the wage increase benefits all hourly U.S. workers at its stores, including Sam’s Club, as well as hourly employees at its websites, distribution centers and its Bentonville, Arkansas, headquarters. A one-time bonus will be given to those Walmart employees who won’t receive a pay raise. The amount, between $200 and $1,000, depends on how long they worked at the company. Walmart said those being laid off at Sam’s Club will still receive a bonus.

In all, Walmart employs 2.3 million people around the world, 1.5 million of which are in the U.S.

Walmart also announced that full-time hourly U.S. employees can get 10 weeks of paid maternity leave and six weeks of paid parental leave. Before, full-time hourly workers received 50 percent of their pay for leave. Salaried employees, who already had 10 weeks paid maternity leave, will receive more paid parental leave.

For the first time, Walmart also promised to help with adoptions, offering full-time hourly and salaried workers $5,000 per child that can be used for expenses such as adoption agency fees, translation fees and legal or court costs.

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List of locations closing:

8801 Old Seward Hwy, Anchorage, AK 99515

1074 N Muldoon Rd, Anchorage, AK 99504

48 College Rd, Fairbanks, AK 99701

3900 Grants Mill Rd, Irondale, AL 35210

2425 E Florence Blvd, Casa Grande, AZ 85194

5757 E State Route 69, Prescott Valley, AZ 86314

1375 S Arizona Ave, Chandler, AZ 85286

15255 N Northsight Blvd, Scottsdale, AZ 85260

3360 El Camino Ave, Sacramento, CA 95821

17835 Gale Ave, City of Industry, CA 91748

12540 Beach Blvd, Stanton, CA 90680

12920 Foothill Blvd, Sylmar, CA 91342

69 Pavilions Dr, Manchester, CT 06042

2 Boston Post Rd, Orange, CT 06477

355 FL-436, Fern Park, FL 32730

7233 N Seacrest Blvd, Lantana, FL 33462

5135 S Dale Mabry Hwy, Tampa, FL 33611

2994 Turner Hill Rd, Lithonia, GA 30038

501 N Randall Rd, Batavia, IL 60510

21430 S Cicero Ave, Matteson, IL 60443

6600 44th Ave, Moline, IL 61265

808 S Illinois Rte 59, Naperville, IL 60540

900 S Barrington Rd, Streamwood, IL 60107

1055 McHenry Rd, Wheeling, IL 60090

460 S Weber Rd, Romeoville, IL 60446

3015 W 86th St, Indianapolis, IN 46268

10859 E Washington St, Indianapolis, IN 46229

4024 Elkhart Rd #1, Goshen, IN 46526

9598 Cortana Pl, Baton Rouge, LA 70815

9750 Reisterstown Rd, Owings Mills, MD 21117

1 Tobias Boland Way, Worcester, MA 01607

340 E. Edgewood Boulevard, Lansing, MI 48911

32625 Northwestern Hwy, Farmington Hills, MI 48334

3745 Louisiana Ave S, St Louis Park, MN 55426

2800 27th Ave S, Moorhead, MN 56560

11 Batchelder Rd, Seabrook, NH 03874

81 International Dr S, Budd Lake, NJ 07828

1900 E Linden Ave, Linden, NJ 07036

301 Nassau Park Boulevard, Princeton, NJ 08540

2649 Erie Blvd E, Syracuse, NY 13224

720 Fairmount Ave, Jamestown, NY 14701

700 Elmridge Center Dr, Rochester, NY 14626

1600 Marketplace Dr, Rochester, NY 14623

5085 Dawn Dr, Lumberton, NC 28360

1101 Shiloh Glenn Dr, Morrisville, NC 27560

4825 Marburg Ave, Cincinnati, OH 45209

9570 Fields Ertel Rd, Loveland, OH 45140

1145 Carr 2, Bo Florida Afuera, Barceloneta, 00617, Puerto Rico

Carr 830, Bayamón, Puerto Rico, 00957

Carr 3 Km 82 Bo Junquitos, Humacao, 00741, Puerto Rico

615 Old Hickory Blvd, Nashville, TN 37209

1805 Getwell Rd, Memphis, TN 38111

1615 S Loop W, Houston, TX 77054

13331 Westheimer Rd, Houston, TX 77077

22296 Market Place Dr, New Caney, TX 77357

12919 San Pedro Ave, San Antonio, TX 78216

741 E Little Creek Rd, Norfolk, VA 23518

4571 S Laburnum Ave, Richmond, VA 23231

901 S Grady Way, Renton, WA 98057

1101 Outlet Collection Way, Auburn, WA 98001

7050 Watts Rd, Madison, WI 53719

1540 S 108th St, West Allis, WI 53214

13550 Aurora Ave N, Seattle, WA 98133

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