Home improvement retailer Lowe’s is offering hourly employees $55 million in bonuses to help offset the sting of inflation, which has remained near 40-year highs all summer, the company announced on an earnings call on Wednesday.
“In recognition of some of the cost pressures they are facing due to high inflation, we are providing an incremental $55 million in bonuses to our hourly front line associates this quarter,” said Lowe’s chief executive Marvin R. Ellison on an investor call on Wednesday.
“These associates have the most important jobs in our company, and we deeply appreciate everything they do to serve our customers to deliver a best-in-class experience.”
Lowe’s is offering this incentive, even as inflation moderated slightly, with gas prices softening in July from their peak the previous month, a welcome sign for the policymakers at the Federal Reserve, which has been raising interest rates to combat inflation.
These bonuses will give a boost to workers at a time when food prices, housing costs and other costs continue to soar, disproportionately affecting the lowest-income households.
The temporary relief doubles as a retention bonus in a booming labor market that has afforded workers leverage to quit their jobs and negotiate higher wages.
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 USAA gave some employees a one-time $1,000 bonus.
Other businesses around the United States have been offering workers bonuses and gift cards to offset the cost of gas.
A draft of a bill in Congress is currently proposing a 2.4% inflation bonus for Department of Defense employees who makes $45,000 or less.
Wage increases, including bonuses, often spark concern from some economists during inflationary periods about triggering a wage-price spiral, where higher wages trigger more spending, causing companies to raise prices further, in an ongoing cycle that can exacerbate inflation.
Yet, record wage growth for American workers is not keeping up with inflation.
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