- The Washington Times - Monday, August 7, 2006


Wal-Mart Stores Inc. is raising starting pay at about a third of its nearly 4,000 U.S. 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 U.S. employees, whom it calls associates.

Two weeks ago, 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 mega-retailers 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 tracks economic and other trends, said Wal-Mart appeared to be reacting to negative publicity about its pay after Chicago adopted the ordinance.

“The increase in starting salary is a very smart thing to do,” Mr. 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 across the country, Wal-Mart spokesman John Simley said.

“It’s part of a wider effort that’s been under way for more than two years, not related to the Chicago ordinance,” Mr. 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 introduced lower-cost health plans this year with premiums as low as $11 a 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,” Mr. Simley said.

The changes help in two ways, Mr. Simley said. Higher starting pay makes Wal-Mart more attractive to new workers and the wage caps give current associates an incentive to move to higher positions if they want to make more money.

Some associates already are 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 Bentonville, Ark.-based retailer did not specify the new starting rates or give examples for the new pay caps. Mr. Simley said the numbers vary too much across the country to provide an accurate average .

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 raise about 6 percent, Mr. Simley said.

“This does not translate into an across-the-board pay increase for all associates,” Mr. Simley said.

He said the pay changes would not have an effect either way on Wal-Mart’s personnel costs for the year.

Susan Chambers, executive vice president of the company’s People Division, said Wal-Mart remained competitive with benefits including health care, 401(k) plans, profit sharing and annual incentives.

She said that was why “people stand in line to apply for Wal-Mart jobs.”

As of July 31, the company operated 1,146 Wal-Mart discount stores, 2,098 Supercenters that combine a supermarket with general merchandise, 567 Sam’s Club warehouse stores and 107 Neighborhood Market grocery stores.

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