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Wal-Mart pay hike raises hopes of workers and shoppers

Wal-Mart raising entry-level wages to at least $9 an hour, $1.75 above federal minimum wage

With Wal-Mart raising the minimum wage for its U.S. employees to at least $9 an hour, some workers who are making a bit more now hope they're not left behind.

Wal-Mart Stores Inc. said Thursday that the hike for 500,000 employees, starting in April, is part of comprehensive changes to the company's hiring, training, compensation and scheduling programs in the United States, as well as to store management structure.

It said the changes are expected to cost more than $1 billion in the retailer's current fiscal year, which began Feb. 1. Wall Street reacted by pushing shares down $2.77, or 3.2%, to $83.52.

Darren Perkins, though, hopes that the wage hikes will eventually boost his own pay of $10.20 an hour. The overnight stocker, who started working at a Wal-Mart in Los Angeles' Crenshaw neighborhood this week, said he struggles with paying the rent and other bills every month.

"As they escalate pay, I expect I'll get a little more," Perkins, 51, said. "I have certain bills -- if I have to work here 16 hours a day -- I want to pay."

The South Los Angeles resident said he also wants to help out his three children. His youngest son just started college, and any pay raise could contribute to his tuition.

"This gives me the drive to come to work and work hard," he said.

The pay raise puts entry-level wages $1.75 an hour above the federal minimum wage. In addition, all current employees will be paid at least $10 an hour by February 2016, the company said.

In California, the minimum wage already is $9 an hour and rises to $10 next year.

Wal-Mart also is launching a program for future associates in which they will be paid $9 or more an hour next year, receive skills-based training for six months and then be guaranteed at least $10 an hour after completion of the program.

Wal-Mart, the world's largest retailer, has been under intense pressure from organized labor groups to raise its starting hourly wage to $15 and provide workers with more consistent hours.

With its new changes, the company's average full-time wage will rise to $13 an hour, from $12.85, the Associated Press reported. For part-time workers, the hourly wage will be $10, up from $9.48, the AP said.

Wal-Mart said it expects 500,000 full-time and part-time employees at Wal-Mart stores and Sam's Clubs in the United States, nearly 40% of its 1.3 million U.S. employees, to benefit from the pay raises. 

Sanders Mosley recently quit his second job, giving up work as a security guard in Hollywood to dedicate 40 hours a week to Wal-Mart.

Mosley said a raise to at least $10 "would make life easier," but he hopes the pay boost is higher than that. That way, he said, he wouldn't have to worry as much about budgeting money for rent, child support and gas.

"It should be $15," Mosley, 26, said emphatically. "Ten dollars is pocket change. Give us a little love."

Zakiyyah Potts transferred from a Wal-Mart in Georgia to the store on Crenshaw Boulevard last July. With that move came a raise -- she now makes $11.20 per hour -- but the 35-year-old said it's still barely enough to get by.

Although Potts splits living expenses with her boyfriend, she's still searching for a second job to help pay for her son's private school tuition.

"Even if I made $12, if you want to buy a home, send your kid to college and have goals, it doesn't work," she said.

Potts, who has a degree in political science, said she hopes to find a job working for the city in the near future. 

"I just don't make enough," she said. "Even if they give me raise after raise after raise, I can't wait for that."

Many Wal-Mart customers said they were glad to see employees get better pay, even if prices were raised to accommodate the extra costs.

"That's good for them. Who doesn't want to get paid more?" said Gladys Solis, 30.

Solis said she used to manage a Burger King restaurant before she quit to stay home with her two children. Most of her employees earned minimum wage and were forced to work two jobs just to make ends meet, she said.

"They were happy with a 25-cent or 50-cent raise," she recalled. "I think this will make everybody happy."

Not Tony Kelly, who lives in the Crenshaw neighborhood. He said $10 an hour was still not a living wage.

"That still leaves people below the minimum standards of American society," said Kelly, who is a retired manager of apartment buildings. "$10 an hour won't buy a home, buy a car or feed a family."

Wal-Mart Chief Executive Doug McMillon said the changes "will give our U.S. associates the opportunity to earn higher pay and advance in their careers."

The company also announced that starting next year it would offer some workers fixed schedules each week and that employees would know their schedules at least two and a half weeks in advance. 

Last year, rallies and marches were held nationwide, as Wal-Mart workers and their supporters pushed for better wages and working conditions. 

"We are so proud that by standing together we won raises for 500,000 Wal-Mart workers, whose families desperately need better pay and regular hours from the company we make billions for," Emily Wells, a leader of OUR Walmart, an organization of workers fighting for better wages and hours at the retailer, said in a statement.  

Wells, however, said the changes announced Thursday were not enough. 

"Especially without a guarantee of getting regular hours, this announcement still falls short of what American workers need to support our families," Wells said. "Wal-Mart can afford to provide the good jobs that Americans need -- and that means $15 an hour, full-time, consistent hours and respect for our hard work."

White House officials cast Wal-Mart’s move as part of a movement among local governments and businesses to raise pay for workers while Congress declines to do so.

“Today’s announcement is another example of businesses, along with cities and states, taking action on their own to raise wages for their workers, recognizing that doing so can raise productivity, reduce turnover and improve morale,” White House spokesman Eric Schultz said.

The Obama administration considers the hike to be one more plug for the president’s personal campaign to raise the base pay of America’s low-wage workers. The hike will put Wal-Mart’s minimum pay rate at $1.75 above the federal minimum wage, a change that resonates with a White House fixated on trying to raise the level nationwide.

The White House continues to call on Congress to give all workers a wage hike, Schultz said, adding that given Republican recalcitrance, the administration and its supporters would continue to make progress in other ways.

Obama has traveled around the country talking about the importance of companies and states taking the initiative in place of Congress’ inaction. In the two years since he began making the public case for higher minimum wage, 17 states and the District of Columbia have instilled requirements to increase the pay of an estimated 7 million workers.

Copyright © 2016, Los Angeles Times

UPDATES

2:55 p.m.:  This article was updated to include additional Wal-Mart employee information.

1:42 p.m.: This article was updated to include Wal-Mart's closing stock price.

12:36 p.m.: This article was updated to include comments from Wal-Mart workers.

12:00 p.m.: This article was updated to include comments from the White House.

11:35 a.m.: This article was updated to include comments from Wal-Mart workers and shoppers.

11:06 a.m.: This article was updated with reactions from Wal-Mart customers and an employee.

9:22 a.m.: This article was updated with details about Wal-Mart's announcement. 

The first version of this article was published at 8:20 a.m.

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