Target Corp. (NYSE: TGT) announced on Thursday that it will raise its minimum wage from USD 12 to USD 13, starting in June. This strategy is related to the 2017 announcement, which pledged to raise the minimum wage from USD 10 to USD 15 by 2020.
The policy applies to the tens of thousands of workers at stores, distribution centers, and the Minneapolis headquarters.
While the federal minimum wage is USD 7.25 per hour, Minnesota requires a USD 9.86 per hour minimum wage for larger companies. Target is well above the requirement.
As the U.S. unemployment rate keeps at its current low level, reporting only 3.8% in March 2019, the competition between large companies that require massive labor forces to operate continues to increase. In order to differentiate themselves, certain companies offer career development, benefit plans and training programs for employees in order to lower the turnover rate.
Walmart Inc. (NYSE: WMT), the largest national company, has a minimum wage of USD 11 and offers an attendance bonus for employees who have limited unplanned absences. Another one of Target’s competitors, Amazon, has already hit the USD 15 minimum hourly wage last November, while Costco also raised its base wage to USD 15 in March 2019.
Last year, Target raised its base wage to USD 12, which made it easier to hire enough workers for holiday seasons. Chief Human Resources Officer Melissa Kremer said, “We were able to start them all at $12 or more — and that helped us reach our seasonal hiring goal ahead of schedule, which gave our teams a lot of extra time to train and prepare for our busiest season of the year.” Chief Executive Officer Brian Cornell also said that it was worth offering higher hourly wage as they could see the response from team members.
As more consumers turn to online shopping or store pick-ups, Target continues to focus on renovations and technology development, both in stores and at Target.com.