Wal-Mart Stores Inc. is raising starting pay at about one-third of its nearly 4,000 US stores by an average 6 percent and introducing wage caps for the first time on each type of job in all stores, the company said yesterday.
The nation's largest private employer said the changes would help it remain competitive with other retailers and meet a need for workers and managers as it continues to expand.
Wal-Mart has more than 1.3 million US employees that it refers to as associates.
The disclosure comes less than two weeks after Chicago became the largest city in the nation to require big-box retailers to pay a ``living wage," despite objections from Wal-Mart and other businesses. Chicago's City Council adopted an ordinance requiring megaretailers to pay at least $10 an hour plus $3 in fringe benefits by mid-2010.
Gerald Celente, director of The Trends Research Institute in Rhinebeck, N.Y., an independent think tank that follows economic and other trends, said Wal-Mart appeared to be reacting to negative publicity about its pay following the Chicago ordinance.
``The increase in starting salary is a very smart thing to do," Celente said.
Wal-Mart denied any connection to the Chicago vote. The pay increases began before the vote and have taken effect at more than 1,200 stores spread across the country, Wal-Mart spokesman John Simley said.
``It's part of a wider effort that's been underway for more than two years, not related to the Chicago ordinance," Simley said. He said the pay restructuring started in June 2004 when Wal-Mart introduced new classifications for each type of job.
The retailer's pay and benefits have been under fire from union-backed critics, who call them skimpy. Wal-Mart has defended its average full-time hourly wage of $10.11 and launched lower-cost health plans this year with premiums as low as $11 month in some areas.
``We've created about 240,000 jobs in the last three years and we are continuing to grow. We need to ensure that we have the most appropriate classification and pay programs to meet our growth needs," Simley said.
The changes help in two ways, Simley said. Higher starting pay makes Wal-Mart more attractive to new workers and the wage caps give current associates an incentive to move up to higher positions if they want to make more money.
Some associates are already making more than the new caps allow for their positions, Wal-Mart said without providing numbers. But no one will receive a pay cut as long as they are in that position, the company said.
The Bentonville, Ark.-based retailer did not specify the new starting rates or give examples for the new pay caps.
The new caps come in the form of pay ranges established for each type of job.
Starting rates will be increased at more than 1,200 stores, with the average hike about 6 percent, Simley said.