It’s just a good business decision to keep on raising hourly wages for workers as it will help retain the top talent that is driving strong sales and profits, explains Target CFO Michael Fiddelke.
That virtuous circle of happy, well-compensated retail employees, not unlike the model Costco has long pioneered, leading to strong financials does appear to be in place at Target.
Target says it will raise its minimum wage as high as $24 per hour this year, depending on the local market. Companies have been raising pay and benefits in an effort to keep and attract workers.
The retail giant currently pays a $15 per hour starting wage but said Monday that it would begin paying workers wages ranging from $15 to $24. The starting rate will depend on the job, the market, and local wage data, among other factors.
Target, which has more than 350,000 workers and more than 1,900 U.S. stores, said in the press release the hike in some starting wages is part of its plan to spend an additional $300 million on its workforce. That investment also includes expanding access to healthcare benefits for hourly workers, beginning in April.
The new approach will apply to hourly employees working in Target stores, supply chain facilities, and headquarters locations, according to a press release on the retail giant’s news website.
“The market has changed,” said Target CEO Brian Cornell in an interview with The Associated Press. “We want to continue to have an industry-leading position.”
In its announcement, the retailer said the “expanded offerings help advance key portions of the company’s Target Forward strategy that aim to create equity and opportunity for Target’s team, partners and communities.”
Last year, the company announced a partnership with Guild Education — the same company that partnered with Dollywood’s parent company — to provide employees with free education programs, including degrees, certificates, and boot camps.
Target workers unite, an independent group made up of rank-and-file company employees, said the “pay rate is probably exclusive for warehouse workers” and that the pay range could mean lower wages in the South.
Walmart raised its minimum wage to $12 last year and Costco raised its minimum to $17. The federal minimum wage is $7.25 per hour.
More than two dozen states, along with the District of Columbia, Guam, and the Virgin Islands, have minimum wages that exceed the federal minimum.
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