Wal-Mart to hike wages for half-million workers to $9 per hour by April

Wal-Mart, the largest US private employer said yesterday that it would hike wages for a half-million workers, a move that comes amid persistent scrutiny of its labour practices and high employee turnover, The New York Times reported.

The retail giant, which for years had been criticised over its low pay and increasing reliance on part-timers, said all of its US workers would be paid at least $9 an hour by April and at least $10 by next February.

According to a number of labour advocates, who had been demanding $15 an hour for service workers, the plan was inadequate.

The move also signals that a better job market - with the unemployment rate now at 5.7 per cent, as against 9.8 per cent five years ago - was leading to higher wages. Wal-Mart had problems retaining staff with competitors like Costco Wholesale offering better wages.

The wage increase by the retailer known for its low pay, could finally mean a better deal for  low-wage workers in America, according to commentators.

Wal-Mart said about 40 per cent of its workforce, including those at the wholesale Sam's Club outlets, would be affected. About 6,000 employees received the federal minimum of $7.25 an hour, while according to Wal-Mart, its part-time workers already earned an average wage of $9.48 and full-timers an average of $12.85.

Meanwhile, Reuters reported that Wal-Mart's wage hike was likely to prompt a rethink on pay across the retail and fast-food sectors, with Target Corp, another low-wage employer, likely to come under pressure to hike wages next.

Labour and shareholder activists are likely to step up pressure on companies which had faced little scrutiny.

Brian Yarbrough, analyst at Edward Jones, says with the largest retailer increasing pay, other would have to follow. He named Target and Staples Inc among other national retailers that would need to revise their pay scales.

He added restaurants could come under pressure to improve pay scales next.