Wal-Mart Announces Pay Increases

The Los Angeles Times reports:

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.

But critics were not cheered by the news.

Chris Kofinis, of the union-backed group WakeUpWalMart .com, said the salary caps were little more than an effort to get rid of higher-paid veteran employees. "This is a determined attempt to push full-time workers out of this company, and they should be ashamed of themselves."

Is the change really aimed at helping workers? Some analysts don't think so.

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."

Even workers seem to see through Wal-Mart's ploy.

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."