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Wal-Mart Follows the Lead of Some Notable Retailers


Wal-Mart recently made headlines as it announced plans to spend over $1 billion to offer higher wages for workers and a better path of promotion through the company and even higher pay. About 500,000 employees (40% of Wal-Mart’s workforce) will get a pay raise over the next six months. Entry-level wages at Wal-Mart will increase to $9.00 an hour by April, the company says, increasing to $10 an hour by February 2016. Managers will get a pay raise to a $13 and then $15 hourly wage over the same timeline.

The federal minimum wage is currently $7.25 per hour. 

Wal-Mart will also invest heavily in a worker training program, allowing for more options for promotion and further education. The $9 per hour ‘training wage’ will apply to new hires, who will receive $10 per hour after completing a six-month program. After that, staffers can choose different paths to pursue, like continuing on as a supervisor or getting training for a specialized job, like working in the deli or bakery.

Scheduling of workers, which has come under heavy scrutiny for its unpredictability and inconsistency, will also be improved. Under the new system, more employees will be able to rely on fixed schedules by choosing to work the same hours each week.

While facing pressure from employees for higher wages, it is not certain whether the pay increases resulted from these protests or not, though those groups within the Wal-Mart organization are claiming victory for the wage hike.

While this also may seem like a big public relations coup for the retailer, Wal-Mart has lots of economic incentive for these reforms. They have faced several quarters of falling profit growth and they have been confronted with increased competition from online behemoths like Amazon, but Wal-Mart has also had operational problems due to heavy reduction of employee hours.

Other reasons for Wal-Mart’s move include the fact that some of the retailer’s competitors have also raised their wages, putting pressure on Wal-Mart to keep up or risk losing staff. Other companies who have increased pay beyond minimum wage include Gap, Inc., who’ll be raising their wages from $9 to $10 this year. The move affects the 65,000 employees of Gap, Banana Republic, Piperlime, Athleta and Intermix, all of which are owned by Gap Inc.

Southwest-based fast food chain, In-N-Out pays their employees a minimum of $10.50. They also offer flexible schedules, free meals, paid vacation and a 401k plan.

Discount grocery chain, Aldi, also pays $10.50.

Ikea’s philosophy of “creating a better everyday life for our people”, shows up in their average hourly wage of $10.76. (The minimum hourly wage depends on where the store is located.)

Sales staff at REI make an average hourly salary of $10.94. Employees can also rent equipment for free, and are able to volunteer with company service projects.

Whole Foods pays a starting salary of $11 and hour. The average hourly pay for employees in 2013 was $18.89, according to a company report.

Notable for their progressive policies, Costco’s starting hourly wage is $11.50. But the average wage for hourly workers is $20.89. In addition to the high hourly wage, about 88% of employees have company-sponsored health insurance. Costco also offers a path for advancement: 70% of the company's warehouse managers started out as cashiers.

Trader Joe’s, also famed for its benefits, pays employees an average hourly wage of $13.29. Additionally, they provide free dental and vision care to all employees who work more than 15 hours per week. 

Employees starting out at Ben & Jerry’s make $15.97 and hour. Staff gets paid leave, health club memberships, and three free pints of ice cream every day.

And the icing on the cake, QuickTrip, a convenience store and gas retailer, offers entry-level workers a starting annual salary of $40,000. That's more than double the federal minimum wage. Employees say it’s a great place to work also. Fortune has named the company one of its “100 Best Companies to Work For” 11 years in a row.

Whether or not Wal-Mart will influence other retailer’s pay scales remains to be seen. State minimum-wage increases, including several city minimum-wage hikes, also seemed to influence part of Wal-Mart’s corporate strategy.

TAGS: retail, retail trends, retailers, career,
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