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Walmart, the largest private employer in the U.S., said on Wednesday it is increasing wages for 7,700 pharmacists and opticians as it expands its health business and seeks to retain workers in a highly competitive environment.
The retailer said the raise will bring the average annual wages of the more than 3,700 affected pharmacists to more than $140,000 a year. Walmart declined to disclose current salary levels, saying it is based on location and role.
It says opticians can now “expect” to earn an average hourly rate of more than $22.50. According to the U.S. Bureau of Labor Statistics, U.S. pharmacists earn an average annual salary of $129,410 and opticians make an average of $21.58 an hour.
In total, Wal-Mart employs 16,000 pharmacists and 12,000 opticians.
The company also said it was launching a program in which employees working in its vision centers could become certified and licensed as a way to move into higher-paying positions.
“We listened to our employees and we took their feedback on how the work environment needs to improve,” Brian Setzer, Walmart’s executive vice president of health and wellness, said at the retailer’s annual shareholder meeting on Wednesday.
Why it matters: Compensation matters in a competitive labor market.
This year, Walmart raised wages for workers across its business units as a way to compete for talent. Inflation not only affects its shoppers, but also its employees. The job market continues to be strong, offering workers more choices. In January, Walmart reduced pharmacy hours in response to a tight labor market.
That same month, the company said it would raise the minimum wage for store workers from $12 to $18 an hour, and from $14 to $19 an hour. Its average wages are still not as high as some competitors, such as Costco.
Last year, it also raised wages for pharmacy technicians who work for Walmart and Sam’s Club to an average of more than $20 an hour, promising more frequent raises.
Walmart has faced pressure from unions, policymakers and activists for years to raise wages for store workers. Because of its size, Walmart’s recent move to boost pay could signal to other companies in the retail industry that the company still needs to offer more incentives to workers to remain competitive in the labor market.
Context: Walmart sees its wellness business as a way to drive growth.
Walmart opened its first wellness center in 2019. By offering health care, the retailer is seeking to gain a deeper foothold in the communities where it operates and capture a larger share of the billions of dollars Americans spend each year on health care.
It currently has 32 health centers in the US and plans to have more than 75 by the end of next year.
Walmart Chief Financial Officer John David Rainey said this month that “strong growth” in the health and wellness category helped drive the company’s comparable sales growth in the most recent quarter.
At the same time, there is a national shortage of pharmacists. After three years on the front lines helping fight the coronavirus, large numbers of pharmacy workers have burned out and left the industry. According to the 2021 Employment Outlook report released by the U.S. Bureau of Labor Statistics, the industry is expected to expand at a slower rate than the national average for other industries in the coming years. Most job vacancies will be created “from the need to replace workers who have moved to different occupations or dropped out of the labor force,” the report said.
What’s next: Expect more Walmart updates.
Walmart executives, store workers and suppliers gathered in Bentonville, Arkansas, this week for the retailer’s annual shareholder meeting.
The company is expected to explain its vision for the coming year, providing an update on its consumer base, technological innovations and store revamps. Its health business is likely to be a topic of interest to investors and analysts.
