CVS to Raise Starting Pay to $11 an Hour
08 February 2018 - 11:44PM
Dow Jones News
By Sharon Terlep
said it will use some of the extra cash from the U.S. tax
overhaul to raise its starting hourly pay to $11 for U.S. workers,
the latest company to announce employee perks in the wake of the
legislation.
--
CVS Health
Corp.
The company, with 240,000 U.S. workers, currently pays a
starting wage of $9 an hour, though many employees make more. It
said that in addition to raising the minimum, it will increase pay
for lower-wage retail workers at its nearly 10,000 U.S. stores. CVS
didn't provide an average increase.
A tight labor market has driven up competition for unskilled
hourly workers. Walmart Inc., the country's biggest private
employer, said last month it would lift its starting pay to $11 an
hour. Several states and municipalities already have a minimum wage
at or above $11 an hour.
CVS also will offer all full-time employees four weeks of paid
parental leave and will freeze employee health premiums for the
coming year. About 100,000 workers are enrolled in CVS's employee
health plan.
The moves are expected to cost $425 million a year. The company
said last month it expects the tax changes will boost cash flow in
2018 by about $1.2 billion.
"We said that we would invest our tax savings back into our
business, and that's exactly what we're doing," CVS Chief Executive
Larry Merlo said in a statement.
CVS said paying a more competitive wage to retail workers, from
pharmacy technicians to cashiers, will bolster efforts to make its
stores into health-care hubs. Reinventing its stores is a key cog
in CVS's plan to create a vertical health-care system with
insurance giant Aetna Inc., which CVS last year agreed to acquire
for $69 billion.
Other money from the tax plan will go toward items such as data
analytics and pilot programs aimed at improving health
outcomes.
Write to Sharon Terlep at sharon.terlep@wsj.com
(END) Dow Jones Newswires
February 08, 2018 07:29 ET (12:29 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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