Behavior Change
Target Becomes Latest Retailer to Raise Worker Pay

Target plans to increase the pay of all its workers to at least $9 an hour starting next month, following similar moves by rivals Walmart and T.J. Maxx.

In February, Walmart announced it would be giving pay raises to around 500,000 full-time and part-time associates at Walmart U.S. stores and Sam's Clubs in the first half of 2015. Starting in April, current and future hourly associates will make $9.00 per hour, or $1.75 above the federal minimum wage. By February 2016, current associates will earn at least $10.00 per hour.

Although Target doesn’t plan to officially announce its own wage increase, store managers have been telling workers about it in recent days.

Media outlets such as The Wall Street Journal and FORTUNE have speculated that Target’s move is the latest example of a tightening labor market and rising competition for lower paid workers amid declining joblessness and signs that consumer confidence is returning.

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Another factor that could have weighed the decision was a petition signed by nearly 25,000 UltraViolet members calling on Target to raise its minimum wage. Earlier this month, UltraViolet aired online ads near three of Target’s biggest stores letting employees and customers know that Walmart stores nearby have a higher minimum wage. Thousands of UltraViolet members also made calls to Target’s headquarters and sent tweets to Target executives over the last month.

UltraViolet, which focuses on women’s rights, said this was a “huge victory for hundreds of thousands of women living at near poverty levels nationwide, but it is far from a living wage.” The organization is calling for Target to “meet or beat” the $10 and hour minimum being offered by many of its competitors.

IKEA, for example, late last year announced it would be raising its average minimum wage in US stores to $10.76 per hour. However, rather than an across-the-board increase, the furniture company said hourly wages will vary based on the cost of living in each store location. Centering on employee needs, the wage increase is based on the MIT Living Wage Calculator, which takes into consideration housing, food, medical and transportation costs plus annual taxes.

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