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Walmart said on Thursday that it plans to raise wages for more than 565,000 store workers by at least $1 an hour, as the all-important holiday shopping season is set to kick off in the middle of a desperate labor crunch across the country.

With its third wage investment over the past year, Walmart’s U.S. average hourly wage is now $16.40, Walmart U.S. Chief Executive John Furner said in a memo to staff.

Workers in Walmart’s frontend, food & consumable and general merchandise departments will receive the higher wages, effective Sept. 25, Furner said.

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The holiday season – worth nearly $800-billion last year – marks the busiest time of the year for retailers, making up a majority of their annual sales. It includes Black Friday, Christmas and the New Year.

But a nationwide worker shortage due to the COVID-19 pandemic has retailers concerned they will not have enough workers in stores and warehouses to handle to extra sales online and in stores.

Walmart, which raised pay for more than 425,000 stocking and digital associates earlier this year, said on Wednesday it plans to hire 20,000 workers at its supply chain division. In July, the company said it would pay 100 per cent of college tuition and book costs for its associates.

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