Target Raises Minimum Wage to $15 an Hour Starting July 5
Target is raising its minimum wage to $15 an hour beginning July 5, CNBC reported. The retailer will also be giving hourly employees a one-time bonus of $200. Target temporarily raised its wages by $2 an hour in March as the COVID-19 pandemic began, so this announcement makes the raise permanent. This raise will be for hourly employees at stores and distribution centers, and the bonuses will be paid out at the end of July. Target is using the bonuses to recognize its employees' hard work during the COVID-19 pandemic.
Three years ago, Target announced a plan to increase its starting hourly pay from $10 to $15 over three years. Last June, it raised the minimum wage to $13 an hour, and committed to raising it to $15 an hour by the end of 2020. The change in minimum pay will effectively give a raise to about 275,000 employees, CNBC reported. In some cities, such as New York City and San Francisco, employees were already making at least $15 an hour.
Target is spending nearly $1 billion more this year than it did last year on employee-related expenses with the higher wages and expenses related to the pandemic, such as paid leave for employees, protective equipment for employees, and a $1 million donation to the Target Team Member Giving Fund.
Total Retail's Take: Target is catching up with some of its competitors when it comes to employee pay. Walmart's starting pay is $11 an hour, and Amazon.com's is $15. The federal minimum wage is $7.25 and was increased in 2009, but some states have set the bar higher than the federal requirement to account for costs of living in different parts of the country. This most recent wage hike shows Target employees that the company is taking their needs seriously, especially since unemployment is higher than it has been in years due to the coronavirus — i.e., a surplus of potentially cheaper labor is available. Since Target remained open during the pandemic, its employees were deemed essential and risked their lives to fulfill their jobs.
Ashley Chiaradio is the Senior Content Strategist at Total Retail. Ashley has been creating content for more than 7 years, and provides a unique insight in covering the retail industry having worked directly for retailers in the past. She’s passionate about profiling women leadership in the space.