Wal-Mart is raising wages of over 100,000 employees. Will it be enough?
Wal-Mart announced its second wage hike of the year on Tuesday as a response to increasing pressure from unions and politicians.
Sarah Bentham/AP Photo/File
Wal-Mart Stores Inc said it would raise minimum wages for over 100,000 U.S. employees including some department managers and deli workers, its second wage hike this year.
Wal-Mart, the largest private employer in the United States with 1.3 million U.S. workers, has been targeted by labor groups for its minimum wages. The company said in February that it would raise minimum wages for 500,000 U.S. employees.
The wage increases seem aimed at discouraging worker unionization, said Gary Chaison, professor of industrial relations at Clark University. "The general feeling is, 'Why join the union to negotiate with Wal-Mart when Wal-Mart takes care of its own?'" he said.
Retailers and fast food chains including McDonald's Corp, Target Corp and TJX Cos have also raised wages as they struggle to retain workers, who switch between the two industries in a tightening labor market.
"We do think this (wage increases) will help reduce turnover and increase retention," Wal-Mart spokesman Kory Lundberg said.
Wal-Mart does not disclose its workforce turnover rate. Lundberg said the rate was below the industry average.
The company said on Tuesday that it would increase hourly wages for managers of service-oriented departments such as electronics and auto care from July to $13-$24.70 from $10.30-$20.09.
Hourly wage of managers of departments such as clothing and consumer products will rise to $10.90-$20.71 from $9.90-$19.31.
At specialized areas such as the deli sections, workers will earn $9.90-$18.81 per hour compared with $9.20-$18.53 currently.
Associated Press first reported the news. (http://apne.ws/1FrrG2W)
Labor and other groups have been pushing for a higher federal minimum wage, which was last hiked in 2009 to $7.25 per hour. In the 2014 State of the Union address, President Barack Obama called on Congress to raise the national minimum wage to $10.10 an hour.
"It (Wal-Mart's wage increases) pretty much ends the debate about whether there should be a minimum wage increase, the question now is exactly how much," Chaison said.
Wal-Mart will also start paying store associates 10 percent more per hour upon promotion, starting with their Aug. 13 paycheck, Lundberg said.
This means the minimum increase in hourly wage of an associate who has been promoted will rise to 90 cents from about 50 cents.
However, United Food and Commercial Workers International Union spokesman Marc Goumbri said Wal-Mart needed to do more, including raising entry-level minimum wage to $15 per hour and providing consistent full-time work to associates.
(Additional reporting by Yashaswini Swamynathan in Bengaluru; Editing by Kirti Pandey)