Target wage
Retailer raising its minimum hourly rate to $15 by end of 2020
Target Corp. is raising its minimum hourly wage for workers to $11 starting next month and then to $15 by the end of 2020, a move it says will help it hire and keep the best employees and make shopping a better experience for customers.
The initiative announced Monday is part of the discounter’s overall strategy to improve its business, which includes remodeling stores, expanding its online services and opening up smaller urban locations.
Target quietly raised entrylevel hourly wages to $10 last year from $9 from the previous year, following initiatives by Walmart and others to hike pay in a very competitive marketplace.
But Target’s increase to $15 per hour far exceeds not only the federal minimum of $7.25 but the hourly base pay at Walmart, the nation’s largest private employer, and plenty of its retail peers whose minimum hourly pay hovers around $10. Now Target’s raise could force some rivals to match the pay.
“We see this not only as an investment in our team but an investment in an elevated experience for our guests and the communities we serve,” Brian Cornell, CEO of Target, told reporters on a call Friday.
The changes come as there’s more attention on hourly wages. Thousands of workers have protested to call attention to their financial struggles and to fight for $15 an hour. The election of a Republicancontrolled Congress dampened hopes of an increase in the federal minimum wage, but advocates have continued to press at the state and local level.
At the same time, competition for lower-skilled workers has heated up.
As shoppers get more mobile-savvy, retailers want staffers who are more skilled at customer service and in technology such as using iPads to check out inventory.
But with the unemployment rate near a 16-year low, the most desirable retail workers feel more confident in hopping from job to job. Some 75 per cent of hourly retail workers now change jobs within a year, compared with 50 per cent during the Great Recession,
according to Korn Ferry Hay Group, a global consultancy group.
Thirty-two per cent of all first jobs in the U.S. are in retail, according to the trade group the National Retail Federation, and stores overall have more job openings now than they did a few years ago.
Hourly pay at restaurants and hotels is up 3.5 per cent from a year earlier, a much better raise than the 2.5 per cent gain for all employees. For workers at transportation and warehousing companies, where e-commerce growth is fueling hiring, pay is up 2.7 per cent in the past year. Retailers, however, have lifted pay just 1.8 per cent in the past year. That may be spurring more workers to leave for better opportunities: Separate government data shows the number of retail workers quitting their jobs this year and last is at the highest in a decade.
The average hourly pay for cashiers is now $10.14, according to the Korn Ferry Hay Group’s survey of 140 retailers with annual sales of at least $500 million. The survey was conducted in May. A year ago, it was $9.79.