Employment Cooling Signal?… Walmart, the Largest Employer in the US, Cuts Entry-Level Wages

Walmart, the largest employer in the United States, has lowered wages for new employees. This is interpreted as a sign that U.S. companies have begun seeking to reduce labor costs amid a slowdown in the job market.

According to documents obtained by The Wall Street Journal (WSJ) on the 7th (local time), Walmart recently changed the wage structure for new employees. The main point is to reduce the wages of newly hired part-time workers. Ann Hatfield, a Walmart spokesperson, said, "Under the new wage system, newly hired workers must start at the minimum wage," adding, "The new wage structure will not change the hourly minimum wage."

Until mid-July, new workers in certain fields could earn higher wages than existing employees. Walmart's own minimum wage ranges from $14 to $17 per hour depending on the region.

Walmart expects that the wage system reform will make it much easier to reassign workers. In the past, when workers from lower-wage departments were transferred to higher-wage departments, their wages had to be increased, but going forward, worker reassignment will be possible without additional costs.

The background for Walmart's ability to take such measures is analyzed to be the end of the worker-favored market that began during the COVID-19 pandemic. Walmart, known as a symbol of minimum wage jobs, raised employees' wages across the board during the pandemic phase. Walmart is the largest employer in the U.S., employing 1.6 million workers across all 50 states.

[Image source=EPA Yonhap News]

Signs are emerging that the once-hot U.S. job market is beginning to cool down. Last month, the U.S. unemployment rate reached 3.8%, the highest in a year and a half since February last year. Nonfarm payrolls in the U.S. increased by 187,000 compared to the previous month, but this was significantly below the 12-month average increase of 271,000.

The New York Times (NYT) analyzed, "Employment was maintained, but the unemployment rate unexpectedly rose," adding, "This reflects that the U.S. economy is gradually cooling due to high interest rates."

This content was produced with the assistance of AI translation services.