Walmart CEO says the federal minimum wage is 'lagging behind,' Congress should act - CNBC

Doug McMillon, President and CEO of Wal-Mart Stores, Inc., in an interview on October 14, 2015.

David Orrell | CNBC

Walmart CEO Doug McMillon said the federal minimum wage in the U.S. of $7.25 per hour is "too low" and "lagging behind."

He made the comments at the kickoff of the retailer's annual shareholders meeting in Bentonville, Arkansas, where presidential hopeful Sen. Bernie Sanders was present, arguing for wage hikes for Walmart workers, calling what the retailer currently pays "starvation wages."

"It's time for Congress to put a thoughtful plan in place to increase the minimum wage," McMillon told the audience. "Any plan should take into account phasing and cost-of-living differences to avoid unintended consequences."

The biggest retailer in the world, employing 1.5 million people in the U.S., has faced increasing pressure of late to raise its pay. Amazon CEO Jeff Bezos, in his annual letter to shareholders in April, issued a challenge to other retailers, not naming which ones specifically, to match its wages and benefits.

Walmart's minimum wage of $11 an hour, set in January 2018, is still below Amazon's, which was hiked to $15 in November. "Do it! Better yet, go to $16," Bezos said in the letter.

Walmart, however, has said its average, hourly compensation including benefits comes out to be more than $17.50.

Walmart has also been sweetening its perks to include benefits such as the opportunity for employees to earn college degrees in fields related to business and technology, by only paying a dollar a day for their education.

On Wednesday and at Walmart's headquarters, Sanders argued that a $15-per-hour minimum wage "is not a radical idea." He noted Walmart's competitors — Amazon and Target — have started to phase in a $15-per-hour pay floor.

Target will finish phasing in a minimum hourly wage of $13 this month, which puts it on track to reach $15 an hour by the end of 2020.

Sanders added, "The American people are sick and tired of subsidizing the greed of some of the largest and most profitable corporations in this country." Many Walmart workers are relying on public housing and food stamps just to get by, he said.

Walmart has a market value of about $298 billion, and its shares were up roughly 1.5% by Wednesday afternoon, having climbed nearly 12% so far this year. On a constant currency basis, Walmart's total revenues amounted to $500.9 billion in fiscal 2018, and its operating income was $20.50 billion.

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