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The Honolulu Advertiser
Posted on: Tuesday, August 8, 2006

Wal-Mart raises wages at 1,200 stores

By Abigail Goldman
Los Angeles Times

Wal-Mart, the largest private employer in the country, has been strongly criticized for offering its workers low pay and benefits. The giant discount retailer said yesterday that it is raising starting pay by 6 percent at 1,200 of its stores.

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Wal-Mart Stores Inc., under attack for its pay and benefits, said yesterday it is raising starting wages at one-third of its stores.

The United States' largest private employer said it has rolled out an average pay increase of 6 percent for new hires at 1,200 Wal-Mart and Sam's Club warehouse stores in the U.S.

"This is based entirely on wage surveys in every market where we do business," said John Simley, a spokesman for the Bentonville, Ark., company. "The goal is to remain competitive."

Wal-Mart did not identify stores that will see pay rise. Company spokeswoman Tara Raddohl in Arkansas last night said she did not know whether Hawai'i's 10 Wal-Mart and Sam's Club stores are affected.

The company does not disclose starting pay, but reports the average wage for regular, full-time hourly employees in Hawai'i is $10.58 per hour.

Wal-Mart also said it is increasing performance-based pay raises as well as instituting new salary caps to encourage workers to move up through the company's ranks, rather than remain in the same job for years.

Critics, however, said yesterday's announcement does little to change the new hires Wal-Mart pays below the national retail average and has consistently fought efforts to boost workers' standard of living.

Simley said workers who earn more than the maximum amount for their job will not see a salary decrease; however, they will no longer be entitled to raises unless they change positions.

But Chris Kofinis, of the union-backed group WakeUpWalMart.com, said this was little more than an effort to get rid of higher paid, veteran employees.

The announcement by Wal-Mart comes as the company continues its battles against legislative oversight of how it treats workers.

Chicago last month passed an ordinance requiring the nation's largest big-box retailers to pay hourly wages of at least $10 with $3 of benefits by 2010, despite a vigorous campaign by Wal-Mart against the measure. The ordinance will go into effect Sept. 13 unless vetoed by Chicago Mayor Richard Daley, who has criticized the effort as anti-business.

At the same time, Congress has been considering a proposed increase in the national minimum wage from $5.15 to $7.25 an hour.

And last year, legislators in Maryland voted to force Wal-Mart to spend more for its employees' health insurance. Although the Maryland law was invalidated in federal court last month, a similar measure in California has passed the state Senate and is pending in an Assembly Committee.

Mark Husson, an analyst with HSBC in New York, said the announcement is aimed more at public opinion than at Wall Street. Shares in Wal-Mart fell 5 cents to $44.82 yesterday.

"It seems to me that Wal-Mart is trying to make some kind of PR out of the fact that you have to pay a market rate, otherwise nobody turns out for their jobs," Husson said.

Nationally, Wal-Mart pays an average of $10.11. Because the wage increases mostly affect new hires, those averages are unlikely to change significantly.

Husson said Wal-Mart's moves were more indicative of the company's constant need for new workers than any major policy change.