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Economy & Business

Under Competitive Pressure, Wal-Mart To Rollout Raises

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Today, Wal-Mart, the nation's largest private-sector employer, said it's giving half a million of its workers a raise. The minimum wage at Wal-Mart and Sam's Club stores in the U.S. will increase to $9 an hour starting in April. And next year, it will go up more to $10 an hour. NPR's Yuki Noguchi reports.

YUGI NOGUCHI, BYLINE: In a message to employees, Wal-Mart CEO Doug McMillon made good on his months-long promise to bump wages for the company's lowest-paid workers.

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DOUG MCMILLON: It's clear to me that one of the highest priorities today must be an investment in you, our associates.

NOGUCHI: Half a million Wal-Mart workers will be making a $1.75 more than the federal minimum, starting in April. The company will also make changes to its hiring and training programs, which along with the wage increase will cost Wal-Mart a billion dollars this year. As for why the company made the move now, there are a few explanations.

HAEYOUNG YOON: It is the workers who came together and demanded that they want higher wages and better working conditions.

NOGUCHI: Haeyoung Yoon is deputy director at the National Employment Law Project, a workers' advocacy group. She says for several years, Wal-Mart workers, along with workers in fast food and domestic work, have won popular support for higher wages. Yoon also points to the many states and cities that have already raised their minimum wages. Wal-Mart's decision, she says, is a good one.

YOON: But we have to really make sure that these are not just empty promises.

NOGUCHI: But many, including Wal-Mart's own CEO, say the pay increase also reflects an economic reality - the labor market has improved. And other companies, including retailers that would compete against Wal-Mart for talent, have already raised their wages. Panera Bread and Aetna recently raised wages for their lowest-paid workers. Gap, Costco and IKEA also already pay higher than the federal minimum. David French is senior vice president at the National Retail Federation.

DAVID FRENCH: Minimum wage is really a political issue. I think Wal-Mart making this decision reflects a business reality.

NOGUCHI: French says there's healthy competition for talent and very few retail workers earn the minimum wage.

FRENCH: Most retailers, especially larger retailers, pay well above minimum wages.

NOGUCHI: But pay is only part of the issue for Anthony Rodriguez, who works for Wal-Mart in Rosemead, Calif. He says a pay increase is good for his co-workers earning less than he does, but Rodriguez says he and many of his colleagues want to work more and worry the pay increase could lead to fewer hours. He's looking for a second job, but says it's hard because his hours at Wal-Mart fluctuate week to week.

ANTHONY RODRIGUEZ: Because they do change my schedule up and down, whether it's morning or night.

NOGUCHI: Wal-Mart said today it is trying to address some of those concerns. It plans to institute a new system it says will give workers more control over their schedules. Yuki Noguchi, NPR News, Washington. Transcript provided by NPR, Copyright NPR.