Wal-Mart pay hike welcome news to employees, labor leaders

News that Wal-Mart plans to boost her pay to at least $10 an hour cheered Malika Hall, a single mother who scrimps to care for herself and her three children.

"My first thought was, maybe this means I won't have to live paycheck to paycheck," she said Friday near the Heights-area store where she has worked for three years. During that time, she said, her hourly pay has risen to $8.70 an hour, up from $7.50, but her cost of living has become "higher than what I get paid."

The news also excited local labor leaders, who said it's about time the retail behemoth addressed its miserly reputation among many of its employees and their advocates. They hope the move will spur other employers to raise wages.

"What Wal-Mart is doing is energizing folks," said Linda Morales, organizing coordinator for the Greater Houston Project, a joint effort by the AFL-CIO and central labor councils to expand union membership and political involvement.

"They see their work is paying off," said Morales, who pointed to the "Fight for $15" rallies and other public demonstrations at fast-food restaurants and other places that rely largely on a low-wage workforce.

Wal-Mart announced Thursday that starting in April, its workers will earn at least $9 per hour, or $1.75 above the federal minimum wage. By February 2016, those workers will make at least $10 per hour. Across Houston, where Wal-Mart is the area's largest employer with more than 30,000 full- and part-time employees, the promised pay raise was met with enthusiasm, said Todd Manley, regional general manager for the Southeast Texas region.

"It showed we are making an investment in them," Manley said. "They are thrilled with what it means, not just to them but the overall impact in the store to work at Wal-Mart. We hope it will improve retention and ultimately give customers a friendly experience in the stores."

Manley said he attended three employee meetings at Houston stores and said many of the workers were "overwhelmed." He also said several local stores saw an immediate spike in job inquiries.

"I thought we would get some of that but didn't know it would be so dramatic, so quickly," he said.

'Our Wal-Mart'

Richard Shaw, secretary-treasurer of the Harris County AFL-CIO, credited Wal-Mart's decision to orchestrated campaigns, such as "Our Wal-Mart," spearheaded by the United Food and Commercial Workers Union, and "Fight for $15."

The efforts show the value of organizing outside of traditional collective bargaining, he said. Even if employees aren't officially represented by a union, they still can push for effective changes.

Shaw also cited the growth of warehouse club Costco as an example of a large retailer that pays living wages and provides health insurance while still making money. Costco is known to offer wages of $20 an hour.

Sees more to decision

One retail analyst isn't buying Wal-Mart's explanation that it is raising wages as an employee motivation and attraction tool. Rather, it was a reaction to the economic, political and public relations pressures the company was facing, said Howard Davidowitz, chairman of Davidowitz & Associates, a retail consulting and investment banking firm in New York.

In many ways, it was the best choice the company could make, even if Wall Street isn't jumping for joy, he said. The company was already paying higher wages in the states that have a higher minimum wage, he added.

Wal-Mart has also been struggling with its image, especially as more retailers announce wage increases at the same time that financial journals highlight the massive wealth of the Waltons, the retailer's founding family.

"They look ridiculous," Davidowitz said.

If Wal-Mart was a small company, it wouldn't have such a big bulls-eye on its back, he said. But as the nation's largest private employer, its low wages stuck out especially - as President Barack Obama has focused recently on income inequality and pushed Congress to raise the minimum wage.

"Put it all together, they woke up and realized they had to do it," Davidowitz said. "I think that is what it came down to."

'We're not there yet'

Morales, of the Greater Houston Project, said while she was encouraged thousands of workers would be getting a pay raise, even a bump to $10a hour is not enough. A full-time worker earning $10 an hour would still fall below the poverty line if responsible for a family of four.

"We're not there yet," she said.

Hall said she would prefer to stay at Wal-Mart than look for another job, and the pay raise would make that more likely. She likes her stable schedule, working 8 a.m. to 5 p.m. Friday to Tuesday and was recently chosen for a department manager position.

"This will make a lot of difference in people's lives," she said.

Ready to earn more

Tommy Palmer, 24, has worked at several local Wal-Marts. His immediate reaction to the pay raise announcement: Finally.

Palmer, who makes $8.80 an hour, has seen a 40-cent increase since he started five years ago. Getting to work from his northwest Houston apartment requires two bus trips, and he said he hasn't been able to get a full 40 hours in a week since the holiday season. He prefers working 7 a.m. to 4 p.m. so that he can pick up his three young children from school, but his schedule changes weekly. He said he sometimes works late shifts.

Palmer, who has experience in the gardening, toys, automotive, paint and grocery departments, said he has learned a lot of skills with Wal-Mart, including how to paint, sell fishing licenses and operate a forklift. He also has received customer service training.

"I'm hoping it improves more so I can stay," he said. "I like it here. They teach you a lot. When you leave, you know a lot. They really do help."