The announcement itself was an unusual move for the retailer, which typically doesn’t release media statements when making pay hikes. Reuters reports that the organization previously raised their minimum pay rate by $1 per hour in 2015 and 2016.
“Target has a long history of investing in our team members. We care about and value the more than 323,000 individuals who come together every day with an absolute commitment to serving our guest,” said Brian Cornell, CEO and chairman of Target, in the press release. “Target has always offered market competitive wages to our team members. With this latest commitment, we’ll be providing even more meaningful pay, as well as the tools, training and support our team needs to build their skills, develop professionally and offer the service and expertise that set Target apart.”
Why Target Is Raising Pay
The Washington Post notes that Target’s move comes a year after competitor Walmart’s decision to raise minimum hourly pay to $10, and that the tightening labor market may be putting pressure on employers to increase wages.
“The biggest piece of leverage an employee has is to say, ‘Look, I can quit and go to this other place,’” Heidi Shierholz, senior economist at the Economic Policy Institute, told WaPo. “When that starts happening, employers have to raise wages.”
Target said that the new pay rate will apply to the 100,000 temporary workers that the company will hire for the holiday season this year. The company declined to tell CNBC how many of its 323,000 workers will see a raise.
Fight for $15, a labor group devoted to raising the minimum wage to $15 an hour, called the move “a major victory.”
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