August 22, 2022
Lowe’s is spending a total of $55 million on hourly store employee bonuses to help them offset the brunt of inflation, which hit near 40-year highs for most of the summer.
Speaking on the home improvement retailer’s second-quarter conference call, CEO Marvin Ellison said, “As they face some cost pressures from high inflation, we’re offering our hourly frontline workers a $55 million bonus increase this quarter. “These people have the most important roles in our business, and we really value everything they do to provide our customers with a best-in-class experience.”
In addition to the bonus, Lowe’s is offering employees an additional 10 percent discount on everyday household and cleaning items for a limited time to help offset inflationary pressures, said Joe McFarland, EVP of Stores. Mr McFarland said: “Employees can now purchase these products at a 20 per cent discount which will hopefully ease the burden of inflation on many of these items. At Lowe’s, we continue to grow our careers by providing the tools to build careers,” said Mr. McFarland. Will continue to look for meaningful ways to improve colleagues’ work-life balance.”
Lowe’s employs approximately 300,000 people.
Along with other retailers, Steve Leonards announced on August 15 that 2,500 of its full-time and part-time employees would be given a gift certificate to buy groceries at the grocery store to help offset inflation. Some other companies in other sectors and some municipalities also offer inflation-related premiums.
Retailers are raising wages and increasing benefit packages to improve recruitment amid a tight labor market and increased minimum wage rates in many markets. Some have also given wage bonuses to vulnerable employees related to the pandemic.
Continued wage growth can create a self-perpetuating cycle of rampant inflation in a catastrophic “wage-price spiral,” but overall wage growth has not kept pace with inflation.
In the trailing 12 months through July, median hourly earnings in the US rose 5.2 percent to an average of $32.27 for private employers. Inflation in July was 8.5 percent higher than a year ago.
Discussion Questions: Has inflation made retail jobs more or less attractive to job seekers? Will one-time bonuses, gift certificates, or time-limited rebates be effective in helping stores keep employees on the front lines?
“Has inflation made retail jobs more or less attractive to job seekers?”