Thousands of Target employees are about to get a raise.
The big-box retailer 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.
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.
"Target has always offered market-competitive wages to our team members," Cornell said in a statement. "With this latest commitment, we'll be providing even more meaningful pay, as well as the tools, training, and support ... that set Target apart."
Target also reiterated its sales and earnings outlook for the third quarter and full year. That means the increased salary expenses aren't expected to affect the retailer's bottom line, since Target baked the wage hike into its $7 billion investment plan.
"This is our continued focus of investing in the Target team," said Cornell.
Target said the wage increases will begin in October and will apply to the 100,000 temporary workers that the retailer plans to hire ahead of the holidays. Only two states in the U.S. — Massachusetts and Washington — currently have a minimum wage of $11 per hour. All others fall below that threshold, but many states already have plans in place to further hike pay in the coming years.
Target also committed to boosting its minimum wage to $15 per hour by 2020.
Target has declined to comment on how many of the roughly 323,000 employees at its more than 1,800 stores will be receiving the pay increases. The company has emphasized that it wants to "recruit and retain strong team members."
Many retailers, such as Gap, Ikea, Costco and Whole Foods, have been offering competitive minimum wages despite congressional unwillingness to boost the federal minimum wage — a number that hasn't budged since 2009.
Democrats recently introduced a $15 minimum wage bill, backed by Sen. Bernie Sanders, following the Obama administration's second-term proposal to raise the level to $10.10 an hour, which got no traction in Congress.
President Donald Trump has flirted with the idea of raising the federal base pay to $10 an hour. At a press conference in Florida last year, he told the crowd: "The minimum wage has to go up. ... At least $10, but it has to go up."
For now, states — and individual companies — are left to make their own decisions on whether to raise the bar.
kasabe on September 25th, 2017 at 16:10 UTC »
Former Target worker here - this isn't really big news. I started at $7.50 an hour back in 2011 and when I left last year the company minimum was $10. They effectively raised the company minimum every year.
However, every time I got a company raise, they would not adjust my pay based on my annual raises. After working there six years I was making $10.17, and a new person who walked in the door that same day could make $10.
If I were still working there today, I would guarantee that even with seven years of experience, I would make $11 with this new increase as would everybody else. My tenure would not have been adjusted or accounted for.
Most of my raises were anywhere from 7 cents to 17 cents annually. While that doesn't seem like much, over the course of six years, that adds to an extra dollar per hour I should've been making.
Again, annual minimum wage raises has come to be expected with Target. $15 by 2020 seems normal to me, that's $1 per year almost, which is what they've been doing for a while.
What Target really needs to do is raise the minimum wage and then adjust for tenure and annual performance reviews. If they're really "very definitive" and "very declarative" about their commitment to, and investment in its employees like the CEO Cornell says in the article, this should be a no brainer. People like me leave after their six years because you're expected to do more work because of your tenure and you don't get the pay or respect that comes with it. Treat your employees right for the amount of time they've put in with your company, and they'll be happier. I guarantee it.
Granoland on September 25th, 2017 at 15:52 UTC »
"Well, yeah I can see that. That's like 4 years away.
Shit, I mean 3 years awa-
HOLY SHIT 2020 IS ALMOST 2 YEARS AWAY. WTF."
paleo2002 on September 25th, 2017 at 15:12 UTC »
Target - All We Have to Do is Be Better Than Walmart!
I'm sure having better paid, less miserable employees is good for business. Hopefully other large retailers will follow Target's example.