Minimum wage to be hiked at U.S. Ikeas

10% increase, to $11.87/hour, is better than what chain’s Canadian stores currently pay

NEW YORK— Ikea’s U.S division is raising the minimum wage for the second year in a row as the Swedish ready-to-assemble furniture chain looks to improve its relations with workers and reduce worker turnover.

Starting Jan. 1, Ikea’s average minimum hourly wage will increase to $11.87, which is $4.62 above the current federal wage and marks a $1.11 increase, or 10 per cent, from this year’s average minimum pay.

However, workers at Ikea Canada only earn an average minimum wage of $11.48, up from $10.94 in 2014 and $10.39 in 2013.

The U.S. increase will affect 32 per cent of Ikea’s 10,500 store workers in the country and will raise the average hourly wage to $15.45. That’s up from the current $14.19 per hour. The increase also covers workers in some distribution centres.

An Ikea Canada spokesperson said: “We applaud the action taken by Ikea USA as it aligns with our global ambition to be an employer of choice . . . Ikea Canada is an award-winning employer who has a long-standing commitment to providing our coworkers with a total compensation package that exceed industry standards. Ikea Canada is proud that 97 per cent of our employees earn over $11/hour with 32 per cent making over $17/hour.”

The pay raise comes as several retailers, including Wal-Mart Stores Inc., have announced wage hikes and other incentives to attract workers and to stay competitive in an improving job market. They’ve also faced pressure from labour-backed groups to increase wages and improve working conditions.

Rob Olson, chief financial officer at Ikea’s U.S. division, said the increase announced last year was based on data a few years old from the MIT Living Wage Calculator, which takes into consideration housing, food, medical and transportation costs plus annual taxes.

Ikea saw the need to raise wages for next year based on new data from the living wage calculator.