When comparing major retail chains in the United States, Walmart and Target are two of the biggest names that come to mind. With thousands of stores across the country and billions in revenue each year, Walmart and Target employ over 1 million workers each. Given the size and scope of these retail giants, a common question that arises is whether one pays its employees more than the other.
Walmart and Target have similar business models as large big-box retailers offering a one-stop shopping experience across a variety of departments, including groceries, clothing, electronics, home goods, and more. However, there are some key differences between the two chains:
- Walmart has over 4,700 stores nationwide, while Target has less than 2,000 locations.
- Walmart offers lower prices across the board, while Target positions itself slightly more upmarket.
- Walmart has a larger revenue at over $500 billion annually, compared to Target at around $75 billion.
- Target pays higher starting wages at $15 per hour, versus Walmart at $12 per hour.
While the two retailers compete across many fronts, pay disparity has been one of the biggest differences, especially in recent years. Target has publicized efforts to increase its minimum wage, while Walmart has faced protests and pressure to raise employee pay. This leads to the central question: who really pays more right now, Walmart or Target?
Average Hourly Wages
One of the most direct ways to compare Walmart and Target pay is to look at average hourly wages of in-store employees at each company. While individual wages can vary based on job type, experience level, and location, the overall averages provide insight into company-wide pay.
According to salary comparison site Payscale, the average hourly rate for Target employees is approximately $13 per hour. This includes cashiers, sales floor team members, stockers, and more. For Walmart, the average comes in lower at around $11 per hour when aggregating similar in-store positions.
When isolating just cashier roles, the gap is a bit larger. The average hourly wage for a Walmart cashier is around $10.50, while Target cashiers make approximately $12.50 per hour on average.
Average Hourly Wages
| Retailer | Average Hourly Wage |
|---|---|
| Target | $13 |
| Walmart | $11 |
Based on average hourly wages alone, Target does appear to pay slightly higher rates than Walmart across comparable in-store positions. However, this does not tell the full story.
Starting Wages
Another important wage comparison point between Target and Walmart is starting wages for entry level roles. While average hourly pay can be influenced by tenure and experience, starting wages show the minimum pay a new cashier or sales floor employee could expect to earn.
Over the past few years, Target has made a big PR push to increase its company-wide minimum wage from $11 per hour to $15 per hour by 2020. The retailer has largely achieved this goal, advertising starting rates of $15 or more across the country.
Meanwhile, Walmart starting wages have increased at a slower pace. In 2018, Walmart raised its company-wide minimum to $11 per hour. This year, it climbed slightly to $12 per hour for most positions. Certain specialized roles, like bakery and deli workers, start at $15 per hour.
Starting Wages
| Retailer | Starting Wage |
|---|---|
| Target | $15 per hour |
| Walmart | $12 per hour |
Judging solely by the published starting wages, Target does pay more than Walmart for entry level store associates. The $3 per hour gap is significant when multiplied over months and years on the job. However, Walmart has argued that its total compensation package makes up some of the difference.
Benefits and Perks
Wages alone do not determine total employee compensation. Both Target and Walmart supplement hourly pay with various benefits packages and perks.
For health benefits, Target offers medical plans starting at around $30 per pay period. Employees are eligible after averaging 25+ hours per week. Walmart also offers plans for around $30 biweekly after an initial waiting period. Like Target, eligibility requires an average of 25-30 hours per week.
Target provides 401(k) matching retirement contributions for employees. After one year, Target will match up to 5% of pay at a rate of $0.50 for every dollar contributed. Walmart associates can sign up for a 401(k) after 12 months but Walmart does not match contributions.
Target gives 10% employee discounts on store purchases along with occasional coupon books. Walmart offers a 10% store discount as well for associates and family.
Both retailers provide access to payroll deduction programs for purchasing company stock. Associates can buy Walmart or Target stock directly from their paycheck at a discounted rate after meeting tenure requirements.
Other secondary perks can include things like paid time off accruals, tuition reimbursement programs, associate car purchase discounts, life insurance options, and more. The specific offerings vary between the companies.
While the benefits packages are largely similar on paper, Target does appear to come out slightly ahead with its 401(k) matching program. But Walmart supports initiatives like Live Better U to help associates earn college degrees cost-free. Overall, the ancillary compensation difference between the two companies is not nearly as pronounced as wage discrepancies.
Location Differences
One thing to keep in mind in the Walmart versus Target pay comparison is that local conditions can impact wages. Even within the same company, pay rates may differ depending on geographic location.
For example, some sources indicate that Target pays higher wages on average in urban centers compared to rural areas. Cities with higher costs of living will tend to have elevated pay rates to attract talent. This means Target employees in San Francisco or New York City may make upwards of $17 per hour or more.
On the other hand, wages in small towns and countryside locations can skew lower, closer to starting rates. The same general principle applies to Walmart pay which can fluctuate depending on regional economic conditions.
Location is an important variable to consider rather than just looking at national average pay rates in a vacuum. Pay for the same job at the same company can differ significantly based on local factors.
Job Type and Seniority
The final layer of complexity in the Target versus Walmart pay analysis relates to job type and seniority factors within each company.
While entry level store associates tend to dominate the overall employee population, there are more specialized roles that command higher pay after moving up the ranks. Department managers, inventory specialists, HR coordinators, and loss prevention officers generally earn well above the minimum wage.
In addition, tenure plays a role within the same job type. A customer service team leader with 5 years experience will typically make more than a new team lead. However, specialized knowledge and performance also impact wage levels regardless of years on the job.
Due to these variables, it is difficult to precisely compare wages for equivalent roles above entry level positions. Pay scale aggregation sites do not have enough data to make definitive conclusions across the myriad of job types and experience levels.
The clearest wage discrepancies are visible when looking specifically at minimums for newly hired store associates. At that level, Target maintains a comfortable lead by advertising a $15 per hour starting rate.
Conclusion
Based on the available data, Target does appear to pay modestly higher wages than Walmart on average, particularly for entry level store employees.
Key takeaways:
- Average hourly wage for Target is around $13 vs. $11 for Walmart
- Target minimum wage is $15 per hour, compared to $12 per hour at Walmart
- Benefits packages are fairly similar, though Target offers 401(k) matching
- Location can impact local wage rates within each company
- Pay differences minimized for higher skilled roles and tenured staff
While Walmart remains the largest retailer in the world by revenue, Target has made concerted efforts to position itself as a premium brand. Higher entry level wages despite having fewer overall stores help Target stand out in a competitive retail labor market.
However, for existing associates deeper in their careers, compensation differences become less apparent between the retail giants. Walmart and Target continue to operate on razor thin profit margins. Significant pay disparities beyond entry level would be difficult to sustain from a business profitability perspective.
In the future, pressure on Walmart to keep closing the wage gap with Target is likely to persist. But for most tenured associates and higher skilled positions, earnings are likely to remain in line with peers in equivalent roles across each company.