Wal-Mart Stores Inc., which has been attacked over its pay and benefits, said Monday that it was raising starting wages at a third of its stores but capping the pay of veteran workers.
The nation’s largest private employer is rolling out an average pay increase of 6?or new hires at 1,200 Wal-Mart and Sam’s Club warehouse stores nationwide, including some of its nearly 200 stores in California.
“This is based entirely on wage surveys in every market where we do business,” said John Simley, a spokesman for the Bentonville, Ark.-based company. “The goal is to remain competitive and make sure we don’t get behind the envelope.”
Wal-Mart is instituting the salary caps to encourage workers to move up through the ranks rather than remain in the same job for years. Employees who earn more than the maximum amount for their job won’t see a salary decrease but will no longer be entitled to raises unless they change positions.
The company also said it was increasing performance-based pay raises but declined to say by how much. Overall, the moves will not increase the company’s labor costs, Simley said, nor will they result in price increases.
n California, Wal-Mart said, its average hourly wage was $10.50, compared with $10.11 nationally. California’s minimum wage is $6.75 an hour, and Congress is considering raising the rate nationally to $7.25 an hour from $5.15.
The announcement by Wal-Mart comes as the company continues its battles against legislative oversight of how it treats workers.
Last month the Chicago City Council passed an ordinance that would require the nation’s largest retailers to pay hourly wages of at least $10, with $3 in benefits, by 2010, despite a vigorous campaign by Wal-Mart against the measure. The ordinance will go into effect Sept. 13 unless vetoed by Mayor Richard Daley, who has criticized the effort as anti-business.
Monday’s announcement is aimed more at public opinion than at Wall Street, which is likely to be indifferent to the news, said Mark Husson, an analyst with HSBC in New York. Wal-Mart shares fell 5 cents to $44.82 on Monday.
“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. “It sounds like they are paying upfront and finding the money by capping the wages in the future.”
The salary caps are unfair to employees who have worked their way up the pay scale, said Delora Lewis, a 14-year Wal-Mart veteran who works as a cashier in Ponca City, Okla.
A good worker ought to be able to earn raises through hard work and dedication, she said, without having to increase responsibilities or time spent at work.
“It makes me mad,” said Lewis, who said she believed that at $15.82 an hour she was paid more than the maximum that would be allowed for cashiers at her store.
“If I quit and start over someplace else, I’d have to start at $8 an hour. You’re kind of stuck in a rut. And they know it, so they’ve got it over your head and you stay and put up with it.”
Wal-Mart’s moves were more indicative of the company’s constant need for new workers than any major policy change, Husson said.
“I don’t think this says very much other than that ‘We hire lots and lots of people,’ “ Husson said. “ ‘But in case the market gets overly concerned that Wal-Mart is no longer a low-cost retailer, we’ll throw this salary cap in there to show people we haven’t gone mad with our labor costs.’ ”
Click here to read about how Wal-Mart shortchanges its employees.
Click here to read a study about how Wal-Mart could raise wages.
Posted by Laura Jack on Tuesday, August 08, 2006
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What Someone is saying in a nutshell is this:
Wal-Mart workers. You are not really valued “associates” as we tell you as a company. We don’t want a long term relationship with you. We don’t want your long term loyalty and we don’t want to give it back in return. After you crawl out of the basement when it comes to wage and benefits, we would rather you vanish forever from our sight than pay you for giving of yourselves.
YOU ARE WORTH MORE!!!
Talk to a local union in your area and find out about how you can have a say in your workplace.
You made the Waltons what they are today. Why does Wal-Mart treat you like you are so valueless?
JM in USA
Tuesday, August 08 at 03:31 PM
Look at this rationally. You have a veteran cashier making $15.82 an hour and you have a new one making $7.50. In a month’s time, the new cashier will be just as effective in his or her role as the veteran. Thus, it is inefficient to waste money on the long time worker because her experience isn’t being put to good use. However, the veteran cashier probably has the ability to make a fine CSM. If she wants more money, she will take that job, making more efficient use of her skills.
This is a way to cut costs on stagnant workers who simply drain the company’s money while providing encouragement for those ambitious and skilled enough to climb the ladder. It makes great business sense.
Of course you guys complain, “It’s not fair!” Don’t you realize that many retailers have used pay ranges for years? This also helps new hires, increasing the earning power of those you guys say have “no where else to go.” There is nothing unfair about it.
Wal-Mart’s statement on the move is here:
Someone in USA
Tuesday, August 08 at 04:23 PM
“Someone in USA”, do you work at Wal-mart? I do. Most of the women that have been there for 20+ yrs took the job to support their families. (Why just women? Because men won’t work as cashiers.) These cashiers don’t care about moving up. They just want to work hard and be paid for it. No one I know at my store wants to move up. Why? Because we see what Corporate does to it’s asst. mgrs and store mgrs. No thanks! Yes, they capped off my wages too. But I know about the intercorporate greed that goes on, even in our little store. And how at the store level our little perks have dried up and good will is non-existent. My store manager has a brand new Cadillac, but when you look at the associate’s parking lot, you won’t see any NEW cars. So, yes, we ARE complaining. What is our incentive to achieve more, do more? It won’t be monetary now. And certainly the other rewards have been cut and dispensed with (like the cook-outs for associates during the summer). We are asked to do more, move faster, make nice with the customers and make Lee Scott look good. We won’t reap any of those benefits. We won’t even be seeing a profit check. The morale at my store has been dismal for at least 2 yrs. We can’t keep associates. We are constantly short-staffed and yet we are pushed to do more and more.
I understand it’s the way of business, BUT Wal-Mart just got done screwing us over with non-flexible schedules (either take the set schedules or we will find someone who will). We just lost our profit checks due to a “remodel”. This is NO incentive to move up. You know why?? THERE AREN’T ANY JOBS TO MOVE UP TO!!! I asked last night. To move into a level 6 pay grade, I’d have to move because my store has it’s level 6 positions filled. Lies upon more lies. I’d like to see Lee Scott come and work in our store for a month and live on our wages. He’d never make it. Our “market manager” (read district manager), can’t even hack working a day in our store. And our store manager has never been seen unloading a palette or even zoning. Believe me, when college is done, I am walking away....nay....running as fast as I can before Lee Scott owns my soul as well.
PK in Illinois
Tuesday, August 08 at 04:44 PM
Ok, here’s the story. They have not only capped our wages, they have eliminated merit increases. It is no longer a company program, except for home office associates of course. The people in our store who are above the embarrassingly low paycaps will never receive another pay increase. Not only that, If we transfer to another store, even in the same payclass we will not transfer at our current payrate, we will have to drop to the cap for that position. If for any reason we change jobs to a lower payclass, we do not lose the difference between the two classes, we lower to the cap of the job. example,,, if a cashier makes $17.00 and they have to move to cart pusher, a much harder job, they would not lose the approximately 40 cents between the two jobs, they would drop to $11.34 per hour, and would never get another pay increase. They are giving a one time $400 “bonus” as a consolation prize to all the people who are locked in at their current pay rate for the rest of their career. The highest payrate in one store in our area is $14.91 however a 30 minute drive away the cap is over $17 dollars an hour. I for one can understand a paycap when a person reaches a reasonable amount, however these caps are embarrassingly low, and they have written in rule after rule to make sure if we change our position even if our job is eliminated, due to company directives,we will lose all we have worked for in the long years with the company.
longterm associate in tennessee
Tuesday, August 08 at 05:06 PM
I expect to see more take-a-ways before it’s all said and done. What is next? Take away our personal days and/or sick days. Ditto with the morale in our store as well.
D in USA
Tuesday, August 08 at 05:16 PM
LIke others have mentioned, I too am being impacted by this stupid idea. I’m a 15 year associate, and I’m basically being told that my knowledge and experience aren’t needed. They would rather hire 3 or 4 high school kids than pay me what I’m due.
They wonder why stock is down? Wonder why our sales in our