Next month Target Corp. is raising their minimum hourly wage pay to $11 and then to $15 by the end of 2020. Target Corp, believes that these moves will help them hire and keep the best employees, thus making shopping a better experience for customers. The announcement came yesterday as Target rolls out their new initiative to improve its business, which includes remodeling stores, expanding its online services and opening up smaller, urban locations.
This is not the first time that Target has raised their minimum hourly pay rate. Just last year the retailer quietly raised their minimum wage from $9 to $10, following the lead of Walmart and other retailers to hike pay in a very competitive marketplace. Target’s proposed hike to $15 would far exceed both the federal minimum wage of just $7.25 and the minimum wage offered by Walmart, the nation’s largest private employer. This pay increase could force Walmart and other retailers like it, to match the pay Target is offering in order to keep good employees.
Brian Cornell, CEO of Target Corp stated on Friday that “We see this not only as an investment in our team but an investment in an elevated experience for our guests and the communities we serve.” This change comes as more and more attention is being brought to the subject of the minimum wage by employees that are protesting in order to bring attention to their financial struggles as they fight for $15 an hour.
As shopper get more mobile and online savvy, the competition for lower-skilled workers has begun to heat up. Retailers are in search of workers who possess better customer service skills and that are tech knowledgeable in using products like iPads to check inventory. According to the National Retail Federation, thirty-two percent of all first jobs are in retail and stores now have more job openings than they did a few years ago. The average hourly pay for cashiers is now $10.14, according to the Korn Ferry Hay Group’s survey of 140 retailers with annual sales of at least $500 million. The survey was conducted in May. A year ago, it was $9.79.
Target says its minimum hourly wage of $11 is higher than the minimum wage in 48 states and matches the minimum wage in Massachusetts and Washington. It says the pay hike will affect thousands of its more than 300,000 workers, but it declined to quantify the percentage of its workforce. It said the increase to $11 per hour will apply to the more than 100,000 hourly workers that Target will be hiring for the holiday season.