Home Depot announced on Tuesday it will spend $1 billion to raise hourly employee wages, making it the latest major company raising worker pay to compete in one of the tightest job markets in history—despite fears of an impending recession.
Though it didn’t disclose how large the pay bump would be, Home Depot announced the wage hike in its fourth-quarter earnings report and said the raise went into effect this month for hourly store employees, who all make at least $15 per hour.
Earlier this month, Delta Air Lines said it would begin raising wages by 5%, going into effect on April 1, for ground workers and flight attendants; less than a year ago it raised employee wages by 4%.
Beginning in March, Walmart, the nation’s largest private employer, is set to raise starting wages for store employees from $12 to $18 per hour to $14 to $19 in a bid “to ensure we have attractive pay in the markets we operate,” the company’s U.S. operations chief, John Furner, told employees last month.
According to a survey by Willis Towers Watson, employers are planning to increase worker pay by 4.6% in 2023 due to high inflation and a tight labor market, making it the highest annual jump in 15 years.
As businesses and the economy bounced back following a deep pandemic recession, companies started hiking wages to help attract workers who were quitting at a record fast pace. By early 2022, 24% of businesses provided bonuses or increased pay due to the pandemic, according to data from the Bureau of Labor Statistics. Sectors with the highest wage increases include the food and service industry, healthcare, retail, manufacturing and transportation and warehousing. This year, the labor market has remained strong despite tech giants like Amazon and Salesforce announcing layoffs amid economic uncertainty, with job growth in January hitting a six-month high.
U.S. companies aren’t alone in adopting wage increases to help attract workers in tight labor markets. One of the largest retailers in Britain, Tesco, announced it will raise hourly pay by 7% for more than 200,000 of its store workers by April. Sainsbury, Britain’s second largest retailer, gave its lowest paid workers a 7.3% wage increase this month, and Asda, the third largest retailer in Britain, said it would raise staff pay by 10%.
Next year, California voters will decide on a statewide proposal looking to raise fast-food minimum wages to $22 an hour. The FAST Act was set to take effect in January, but was paused after a coalition of small business owners garnered enough votes to suspend the law. Fast food giants including McDonald’s, Starbucks, Chipotle and Chick-fil-A donated $1 million each to help block the law, which could set precedent for other states to begin raising minimum pay for fast-food workers.
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