Coverage: Target to raise minimum wage for workers

Target Corp. said Monday it will start raising its minimum wage next month from $10 an hour and will eventually reach $11 for all its U.S. stores.

Lauren Thomas of CNBC.com had the news:

The pay raise will outpace Wal-Mart’s recent increase in its minimum wage. The two retailers have been engaged in a quiet wage war for years.

Target raised its hourly minimum pay rate in April 2015 to $9, up from the federal minimum wage of $7.25 per hour at the time. That move came in response to an announcement by Wal-Mart in February, where Wal-Mart promised to lift its base pay to $10 an hour by 2016.

While Wal-Mart has touted past pay increases, using earnings conference calls to circulate the news, Target has moved more stealthily, only saying earlier this year that it would be investing billions of dollars back into the company.

When asked on a call with media about Target’s decision to make Monday’s news considerably more public, CEO Brian Cornell said he wants to be “very definitive” and “very declarative” about Target’s commitment to, and investment in, its employees.

Zlati Meyer of USA Today reported that the retailer last raised its pay in 2016:

The chain’s last major wage increase was in 2016 when it was raised to $10 an hour.

According to the job search site Glassdoor, Walmart cashiers start at $9.17; Costco cashier assistants at $12.56; and Amazon fulfillment center workers at $12.42.

“On average, we pay 30% more than traditional retail jobs,” Amazon spokeswoman Ashley Robinson said. “We’ve offered competitive wages since our company was founded in 1995.”

Amazon wages depend on the market, building format, shift and employee background, she said.

 Sarah Halzack of Bloomberg Gadfly called the raise a smart move:

By the end of 2020, it plans to bump its wage floor even higher, to $15 per hour. The retailer did not say exactly how many of its 323,000 employees would be affected by the change in policy. It also did not specify how much the pay raise would add to its expenses, according to Bloomberg News.

But even without those details, it seems safe to say that Target is making a smart play by increasing its base wage.

For one, the labor market has tightened in recent years. Hiring and retaining talent on the cheap isn’t as easy as it was during the dark days of the recession and its aftermath.

And while it is true that store closures among major chains easily outstrip store openings right now, there are still plenty of chains looking to staff up.