(Bloomberg) — Wal-Mart Stores Inc.'s landmark decision to boost wages for half a million employees will increase pressure on rival retailers such as Target Corp. to follow suit as the labor market tightens and worker pay climbs nationwide.

The world's largest retailer said Thursday that it would begin paying all of its U.S. hourly workers at least $9 an hour by April and $10 an hour by next February. The plan will result in raises for about 500,000 workers in the first half of the current fiscal year and cost about $1 billion, the Bentonville, Arkansas-based company said in a statement.

Wal-Mart, the nation's largest private employer, is trying to reduce turnover among its 1.3 million U.S. workers, which would in turn cut training costs and improve service at its 4,400 domestic stores. With the unemployment rate dropping and jobs more widely available, Wal-Mart's move may ripple through the retail industry, including at Target.