Lowe’s becomes latest employer to give workers inflation $55 million in bonuses


Home improvement company Lowe’s is awarding bonuses totalling $55 million to its front-line hourly employees to help soften the impact of inflation.

At a time when food prices, housing costs and other costs continue to soar, disproportionately affecting the lowest-income households, these bonuses will give a boost to workers.

As a retention bonus in a booming labor market the temporary relief doubles that has afforded workers leverage to quit their jobs and negotiate higher wages.

On an earnings call on Wednesday, the home improvement store chain said that it is offering those workers limited-time discounts of up to 20% on everyday household and cleaning items.

According to Lowe’s chief executive Marvin R. Ellison on an investor call on Wednesday said that “In recognition of some of the cost pressures they are facing due to high inflation, to our hourly front line associates this quarter we are providing an incremental $55 million in bonuses”.

They also said that these associates have an important job in our company and we deeply appreciate everything they do to serve our customers to deliver a best-in-class experience.
Apart from this, Lowe’s is offering this incentive, even as inflation moderated slightly, with gas prices softening in July from their peak the previous month, for the policymakers a welcome sign at the Federal Reserve, which has been raising interest rates to combat inflation.

According to the company’s website, Lowe’s employs approximately 300,000 associates but until now it has not specified how much money each worker would receive and over what time period.
By going through other information relating to this we have found that Lowe’s is not the first company to offer an inflation-related paycheck bump to its employees in a red-hot labor market where employers are struggling to hire. The financial firm USSA gave some employees a one-time $1000 bonus.

Moreover, other businesses around the US have been offering workers gift cards and bonuses to offset the cost of gas. For Department of Defense employees who make $45,000 or less a draft of a bill in Congress is currently proposing a 2.4% inflation bonus.

The CEO and President Ted Decker said in a statement that our team has done a fantastic job serving our customers, while continuing to navigate a challenging and dynamic environment.
Harris said to CBS News that, “The labor movement is very tight on the company and due to this they’re afraid of losing their workforce”. And due to this they’re providing bonuses, additional benefits, so that they may increase wages. To remain a worker at Lowe’s all this is designed to make it more attractive.”

He said “we are looking for various ways to hold onto the workers they have because of the countrywide labor shortage that has been seen in our company”. He also explained that there are several causes of this scarcity of labor.

Despite this, Harris also said that, “The baby boomers are retiring in droves and birth rates started declining from 33 years ago. And due to this the kids who are 18 to 25 years of age entering the workforce are a fraction of the people leaving”. “Now, COVID didn’t help this. Here, many people assume that their life is a lot more transient and thus they realized and they started asking themselves.

Harris said that the bonus money will offer temporary help to Lowe’s workers, it is not as useful as a salary raise. On the other hand, he also said that, “Workers of course prefer a wage raise to a bonus because an increase in wage is permanent whereas a bonus is transitory”.

On the other hand, he said these extra incentives are not without consequences. It can lead to higher sticker prices at the store, intensifying the effects of inflation, when companies move to increase wages or add bonuses.

He said that they have to raise their product prices as their expenses rise, otherwise, they will be losing money”. Here, there is a vicious cycle that higher product prices cause greater inflation which decreases the value of the wage. And so they have to raise wages but doing this leads to higher product prices.

Source:- https://livenewzus.com/lowes-becomes-latest-employer-to-give-workers-inflation-55-million-in-bonuses/

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