Walmart says it will raise minimum wages for its store workers starting March 2. According to a staff memo, the retail giant will increase its average hourly wage to more than $17.50. The company, which is one of the largest employers in the United States, is also introducing other benefits for staff.
The move, which means Walmart’s starting hourly wages will increase from $12 to $18 to $14 to $19, comes at a time when many people are worried about their jobs. In recent months, there have been dramatic layoffs in the technology and banking sectors, and some analysts fear that other industries may follow suit.
In part, however, Walmart’s decision to introduce substantial wage increases could be seen as a positive economic sign. “It suggests that Walmart doesn’t think the economy will hit a recession any time soon, or that if it does, it will be a modest, short-lived recession,” Mark Zandi, chief economist at Moody’s Analytics, told the New York Times. .
It’s also a reflection of the challenges of retaining employees, particularly as Walmart’s hourly rates are still slightly below competitors like Costco.
It is not yet known whether or not the United States will enter a recession this year. Some senior figures in banking have been warning of impending economic doom for some time. Others still think that it is avoidable. Either way, there’s nothing wrong with increasing your emergency fund and paying off debt just in case.
That said, it’s not easy to save and build financial security if you make $17.50 an hour, particularly given the rising costs of living. Assuming a 40-hour work week and 52 weeks per year, that translates to an annual salary of $36,400 and about $3,000 a month before taxes.
Depending on where you live, a large part of that will go towards housing. Median monthly rents crossed the $2,000 threshold for the first time last year, though they are beginning to fall again. The more you can reduce your housing costs, for example by sharing living space or even moving to a lower-cost area, the more money you’ll have in your bank account for other essentials.
Here are some other ways you can stretch a $36,400 paycheck:
- See if you are eligible for government assistance: Depending on the size of your household, you may qualify for federal help with housing and food benefits. Visit Benefits.gov to find out what help may be available.
- Make a budget: Break down what you spend each month in different areas and use it to plan how much you will have to pay for your essential costs. If you spend more than you earn, use your budget to identify areas where you could cut back.
- Try to save, even if it’s just a small amount: If you can save a small percentage of your monthly budget, you can build up a small cushion over time. Having some cash in a savings account can help cover unexpected expenses, like car repairs or the loss of a job.
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