updated 8/7/2006 3:42:19 PM ET 2006-08-07T19:42:19

Wal-Mart Stores Inc. is raising starting pay at about a third of its nearly 4,000 U.S. stores by an average 6 percent and introducing wage caps for the first time on each type of job in all stores, the company said Monday.

The nation's largest private employer said the changes would help it remain competitive with other retailers and meet a need for workers and managers as it continues to expand.

Wal-Mart has more than 1.3 million U.S. employees, which it refers to as associates.

The retailer's pay and benefits have been under fire from union-backed critics, who call them skimpy. Wal-Mart has defended its average full-time hourly wage of $10.11 and launched lower cost health plans this year with premiums as low as $11 month in some areas.

"We've created about 240,000 jobs in the last three years and we are continuing to grow. We need to ensure that we have the most appropriate classification and pay programs to meet our growth needs," Wal-Mart spokesman John Simley said.

The changes help in two ways, Simley said. Higher starting pay makes Wal-Mart more attractive to new workers and the wage caps give current associates an incentive to move up to higher positions if they want to make more money.

Some associates are already making more than the new caps allow for their positions, Wal-Mart said without providing numbers. But no one will receive a pay cut as long as they are in that position, the company said in a statement.

The Bentonville, Ark.-based retailer did not specify the new starting rates or give examples for the new pay caps. Simley said the numbers vary too much by local market conditions across the country to provide an accurate average figure.

The new caps come in the form of pay ranges established for each type of job.

Starting rates will be increased at more than 1,200 stores, with the average hike about 6 percent, Simley said.

"This does not translate into an across the board pay increase for all associates," Simley said.

He said the pay changes would not have an impact either way on Wal-Mart's personnel costs for the year.

Susan Chambers, executive vice president of the company's People Division, said in a statement that Wal-Mart remained competitive with benefits including health care, 401K plans, profit sharing and annual incentives.

Chambers said that was why "people stand in line to apply for Wal-Mart jobs."

As of July 31, the company operated 1,146 Wal-Mart discount stores, 2,098 Supercenters that combine a supermarket with general merchandise, 567 Sam's Clubs warehouse stores and 107 Neighborhood Market grocery stores.

Copyright 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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