Wal-Mart Raises Pay for Some - But Caps It for Others

The world's biggest retailer, Wal-Mart, is to raise starting salaries at nearly a third of its American stores in an effort to remain "competitive". But critics attacked the increase as a shield to disguise new wage caps imposed on longer-term staff.

Wal-Mart said starting pay would go up by 6% at 1,200 of its 4,000 US outlets. The company has been under pressure over its pay rates and Chicago's city council last month passed a law requiring a "living wage" that was specifically aimed at large-store retailers. Wal-Mart's average full-time worker earns $10.11 an hour (£5.30) but many receive considerably less.

The company said changes would include new pay ranges with a maximum for each job, which it described as "near the top of the market in many regions". It said that those wanting to move beyond their range would need to apply for promotion.

In a statement, the retailer's head of human resources, Susan Chambers, said: "Wal-Mart pays competitive wages, and we continue to transform our pay plans as we grow."

A union-backed campaign group with a website at WakeupWalMart.com is touring America on a bus to publicise the company's employment practices. The group's campaign director, Paul Blank, said: "Wal-Mart has coupled this so-called 'salary change' with a salary cap on long-term workers that will not only destroy employee morale and hurt Wal-Mart workers' families but will force many to leave the company."