Wal-Mart raises wage bar

Washington THE modest raises that Wal-Mart has said it will give its lowest-paid workers provide a glimmer of hope for lower-wage workers in other United States companies and industries.

Other retailers and some fast food companies may now feel compelled to follow suit to retain their workers and attract others to fill vacancies, economists say.

Wal-Mart’s move follows a sustained campaign for higher wages by some of the company’s employees and a nationwide debate over whether to raise the federal minimum wage. Given Wal-Mart’s position as the nation’s largest private employer, its decision to yield, even in a limited way, could embolden more US employees to seek pay rises.

‘‘They really set the standard across the retail sector,’’ said Claire McKenna, a policy analyst at the National Employment Law Project, which advocates for lowwage workers.

Josh Bivens, research and policy director at the liberal Economic Policy Institute, said WalMart’s move also reduced the pressure on other retailers to keep labour costs at rock-bottom levels.

Wal-Mart this week said it would increase its minimum pay to US$9 (NZ$11.96) an hour in April and to US$10 by February 2016. The move will mean pay rises for 500,000 of its 1.3 million employees. The average fulltime wage will tick up to US$13 an hour from US$12.85.

Wal-Mart’s decision follows similar steps by other companies. The Gap has raised its minimum wage to US$10 an hour. Swedish home furnishings retailer Ikea raised pay for thousands of its US workers this year by an average of 17 per cent to US$10.76 an hour. Health insurer Aetna has said it will pay a minimum of US$16 an hour, more than double the federal minimum wage of US$7.25.

Workers at McDonald’s and other fast food companies have agitated for higher pay, coalescing around demands for US$15 an hour. But unlike Wal-Mart, which owns all its stores, the fast food industry is largely franchised.

Kathryn Slater-Carter, who owns a McDonald’s franchise, thinks businesses located near a Wal-Mart store could be forced to raise their pay. She suggested that this could be beneficial for everyone: by paying and treating workers better, franchisees could benefit from stronger job applicants and lower employee turnover. ‘‘In any community, how you treat your employees gets known by everyone,’’ SlaterCarter said. ‘‘You can get a bad reputation, and then you have trouble getting employees.’’

AP