The company will benefit from looking more attractive to workers, since unemployment is at a 17-year low, meaning other companies could woo away dissatisfied or potential Walmart employees. University of Michigan business professor Erik Gordon told Bomey that "Walmart would have had to go to at least $11 in many markets in order to retain reliable employees [but] the tax cut made it easier for the company to swallow."
The move shows that Walmart is betting on solid economic growth for the next few years, according to Charles Fishman, author of The Wal-Mart Effect. He also told Bomey that it meant that Walmart recognized that it needed to treat their employees better because "they can't take them for granted anymore."
The minimum-wage hike will take effect in February. The one-time bonuses will cost the company $400 million and will be based on the length of service. Most will get up to a few hundred dollars, but employees who have worked for at least 20 years will get the full $1,000.
UPDATE, Jan. 12: After announcing the wage hikes, Walmart announced hours later it will lay off thousands of workers as it closes 63 Sam's Club stores, some without advance warning to employees, who showed up for work and found the stores closed.