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Category: Distribution and Materials Handling

Supply Chain News: Distribution Labor Costs Continue to Rise



Walmart Offering Weekly Bonuses of as Much as $250

Aug. 10, 2021
SCDigest Editorial Staff

After many years of stagnant wage growth, pay for warehouse workers has been on the rise in the past three years and seems likely to keep rising, especially in a period of it appears strong overall inflation.

Supply Chain Digest Says...

Right now, there are more than 1 million job openings in the US than there are unemployed workers looking for jobs, when normally the reverse situation is true.

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That after Walmart this week announced it has started to pay weekly bonuses to workers in its distribution centers – and the size of those bonuses is significant.

According to a report last week from the Wall Street Journal, some full-time Walmart workers will earn $200 or more in extra pay per week and even more if they work overtime. Walmart says the size of the bonuses is based on the DC’s location and a worker’s role and shift.

Walmart has a total of almost 200 US distribution centers.

In fact, some Walmart DC workers have been offered $1,000 over four weeks for not skipping any scheduled shifts during the second half of the summer - equating to $250 per week.

The bonuses were initiated this month and will continue at least through Walmart’s fiscal year at the majority of store replenishment and ecommerce DCs, a Walmart spokesperson told the Journal.

Walmart’s DC workers recently had an average hourly wage of $20.37. Obviously, a $200 weekly bonus would be the equivalent of an extra five dollars per hour based on a 40-hour work week – and would make it very tough for other companies to keep pace with Walmart’s wages for workers.

Walmart hopes to retain FCs workers to support coming peak season volumes running through its DCs.

Walmart rival Target recently announced a $200 bonus for all of its approximately 340,000 hourly workers, which will be paid out this month, at a cost of $75 million.

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Amazon increased pay for its FC workers earlier this year, on top of the $15 per hour minimum wage it has adopted earlier, and currently pays $1000 signing bonuses at many sites.

And distribution centers also have to compete with in-store retail jobs in terms of pay. Kroger, for example, says that by the end of the year the average hourly rate at its grocery stores will be about $21, when comprehensive benefits are considered, up from $15.50 in March.

CVS has also just announced that it is no longer requiring job seekers to have high-school diplomas for store jobs.

It’s all just a matter of supply and demand. Right now, there are more than 1 million job openings in the US than there are unemployed workers looking for jobs, when normally the reverse situation is true.

What do you think of rising DC pay and Walmart's bonuses? Let us know your thoughts at the Feedback section below.




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