Walmart lowers starting pay for new hires. Will Other Employers Follow?

Walmart, which employs around 1.6 million people in the United States, has recently reduced the starting pay for new employees who work on online orders for curbside pickup or home delivery and those who restock store shelves. This change started in July, and now, new Walmart hires earn about $1 less per hour compared to those who joined just a few months earlier.

Walmart explained that this decision was partly made to make sure that starting pay is the same across different positions. However, this is a shift from when Walmart had increased wages for most of its employees in a competitive job market earlier this year. They had raised the minimum wage for store workers from $12 to $14.

This recent decision by Walmart, although notable because of its size, isn’t really surprising when you consider the changing economic conditions, according to experts.

One expert, Garry Straker from, pointed out that the uncertainty caused by high interest rates is reducing the demand for workers in certain industries like retail, leisure, hospitality, and manufacturing. In simpler terms, it means that businesses in these areas are not hiring as much as before.

Previously, the job market favored employees, which led to higher wages and better benefits to attract and keep workers. But now, it’s not as favorable, and employers are worried about the possibility of a recession.

Mara Marino, another expert from, mentioned that companies might not have as much money to give to their employees due to budget constraints. She explained that after a period of regular pay increases, organizations may need to focus on other things like controlling costs and making profits, which could slow down wage growth. This doesn’t necessarily mean that salaries will decrease, but they might not increase as quickly as they did before.

Will other Employers follow this move?

The big question here is whether Walmart’s decision to lower starting pay is a unique case or a sign of a larger trend. Well, it could be a bit of both. Some other companies are still increasing wages to attract and keep employees. For example, Amazon recently announced that it’s raising the average hourly pay for its warehouse and delivery workers to around $20.50 per hour, and in some places, it’s as high as $28 per hour.

Will other Employers follow this Walmart's move

However, because Walmart is such a huge company, it might influence other organizations, especially those in retail, to do something similar to control costs.

Kathleen Quinn Votaw, the CEO of a consulting firm called TalenTrust, mentioned that companies are trying to manage their profits and expenses. As we approach the end of the year and look ahead to 2024, especially with the possibility of a recession, other employers will closely examine their finances, and employee wages are a significant part of that.

Garry Straker, who works at, added that whether starting wages go down or not depends on the industry. Some industries still have a shortage of workers, like transportation, package delivery, and warehousing. In these areas, workers have more bargaining power to negotiate for better pay.

In simple terms, we might see different things happening in different industries regarding wages in the coming months. Some industries may increase wages, while others might not.

Factors to be considered by Employers

Before Walmart’s recent move, many employers were increasing pay and benefits to stay competitive in a strong job market. Studies show that budgets for raising salaries have been the highest they’ve been in years. For example, a recent study by WorldatWork revealed that salary increase budgets reached their highest point in 20 years in 2023.

Employees also have high expectations when it comes to pay. According to the Federal Reserve Bank of New York, On average, workers are looking for a competitive salary, with the lowest amount they’d accept for a new job being around $78,645

However, there are some indications that this trend might be slowing down. For instance, a consulting firm called WTW surveyed over 2,000 U.S. organizations for its Salary Budget Planning Survey in the summer, and they found that these organizations are planning an average salary increase of 4 percent in 2024. This is slightly less than the 4.4 percent increase in 2023 and the 4.2 percent increase in 2022.

The news about Walmart lowering starting pay should be seen as part of a broader trend of slower wage growth. But before other employers consider reducing wages or slowing down pay increases for their current employees, experts advise taking a careful look at the whole situation.

For example, even though the projected salary increases for 2024 are slightly lower than in the past two years, they are still much higher than the 3.1 percent increase budgeted in 2021 and other increases in the years before the pandemic. In fact, U.S. employers are planning an average raise of 4.1 percent in 2024, which is still a competitive increase.

Experts caution against simply copying the strategies of companies like Walmart without thinking about potential risks and consequences. The economy is influenced by various factors, and trying to understand it without expert guidance can lead to costly mistakes.

Companies can make decisions like lowering wages regardless of the broader economic conditions, and big corporations like Walmart consider many factors that may not be publicly known when making such decisions.

For employers considering reducing starting pay, they should think about the long-term effects, including how it might affect their reputation, employee morale, compliance with labor laws, and their ability to attract and keep talented workers. Lower starting salaries could lead to higher turnover rates as new hires may leave for better-paying jobs elsewhere.

Employees still have many options in the job market, and they often choose employers who offer fair and reasonable wages. Over time, a decision to cut starting pay, like Walmart’s, could affect a company’s profits and customer satisfaction.

In conclusion, organizations shouldn’t rush to make decisions solely based on what other companies are doing. Just because a strategy is popular among competitors doesn’t necessarily mean it’s the right choice for every company.

FAQ – Understanding Walmart’s Pay Reduction and Its Impact

Q1: Why did Walmart reduce starting pay?

A1: To ensure consistent pay across different positions and control costs.

Q2: What does this say about the job market?

A2: It reflects a shift from a worker-favored job market to a more cautious one due to economic factors.

Q3: Will other companies follow Walmart’s lead?

A3: It depends on the industry, but Walmart’s influence might lead some to do so.

Q4: What should employers consider before reducing wages?

A4: Long-term effects on reputation, morale, compliance, and talent retention.

Q5: Are employee expectations changing?

A5: Yes, employees expect competitive pay, but there are signs of a slowdown.

Q6: Should companies mimic Walmart’s strategy?

A6: Experts advise against blindly copying strategies without considering individual circumstances.

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