Walmart is set to give half a million workers a pay raise in the next six months, the company announced on Thursday. The US’s largest private employer is increasing the pay of about 40% of its employees as it fights to stave off criticism of its low wages.

The retailer has faced a barrage of criticism and strike action by workers who have accused the company of paying the bear minimum to many of its staff. The pay hike is likely to put pressure on other big US companies, including fast food giants like McDonald’s, which rely heavily on minimum wage labor.

Workers will make at least $9 an hour, $1.75 above the federal minimum wage. By February of next year, the company says it will pay its workers at least $10 an hour. The wage hike is part of a $1bn investment in staff that also includes a new approach to hiring, training and managing.

The new wage falls short of the $15 an hour that many Walmart workers have been demanding over the past year. It also falls short of the White House proposal of a $10.10 minimum wage. But the wage rise is a significant victory for low wage activists. Walmart has previously said that it does not oppose a minimum wage increase to $10.10 as long as it is not targeted exclusively at large retailers.

The company has also agreed to give workers more control over their schedule. Critics have complained the retailer gives staff little notice of their hours in a bid to increase its own flexibility at the expense of its workers. Walmart will introduce fixed schedules for some workers by 2016 and all associates will be given at least two and a half weeks notice of their hours.

“These changes will give our US associates the opportunity to earn higher pay and advance in their careers. We’re pursuing a comprehensive approach that is sustainable over the long term,” Walmart chief executive Doug McMillon said in a statement.

Low wages and hours, however, are not the only concern raised by Walmart’s workers over the last year. Part-time schedules, unresponsive management and retaliation for complaints and striking are just some of the issues raised.

“Especially without a guarantee of getting regular hours, this announcement still falls short of what American workers need to support our families,” said Emily Wells, a Walmart worker who makes $9.50 an hour and is scheduled for just 26 hours a week. Wells is a leader of OUR Walmart, an organization of Walmart workers who have been lobbying for better wages and schedules.

“With $16bn in profits and $150bn in wealth for the owners, Walmart 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,” she said.

The National Retail Foundation (NRF) said the move showed a mandated increase in the minimum wage was unnecessary. “Government mandates that arbitrarily require businesses to implement politically driven policy are unnecessary and, in fact, create hurdles to job creation, curtail capital investment and pose as barriers to a sustained economic recovery,” said NRF president Matthew Shay.

Josh Bivens, research director of think tank Economic Policy Institute, caleed the statement “stupid and self-serving.” He said the 500,000 Walmart workers identified in today’s announcement paled in comparison to the roughly 27 million workers that would have gotten a raise under last year’s proposed bill to increase the Federal minimum wage to $10.10.

The announcement came as Walmart announced its fourth quarter revenues. The company’s revenue growth was slightly weaker than expected, rising to $131.57b from $129.71bn a year ago, missing the analysts’ forecast of $132.3bn.



“We are not satisfied,” said McMillon. “We have work to do to grow the business.”

On the to-do list: improving customer experience by raising wages.

“We are pursuing a comprehensive approach to our hiring, training, compensation, scheduling programs and store management structure that is sustainable over the long term,” said McMillon during the earnings call.

The increase in pay comes after McMillon said in October of last year that it is company’s intention “that we will be in a situation where we don’t pay minimum wage at all”.



The wage hike could help solve Walmart’s problems with bad customer service and long checkout lines, Paul Trussell, Deutsche Bank analyst, told CNBC.



“There’s been a lot of disgruntled workers, and frankly this does sound like the new CEO both of the US Walmart team and Doug McMillon at the helm taking a step to perhaps correct those past evils,” he said.