New NRF chair supports raising the minimum wage

Kip Tindell, CEO of Container Store Group, will be named as chairman of the National Retail Federation (NRF) next month and the organization may never be the same. Mr. Tindell, an advocate of conscious capitalism who manages a company known for its "yummy culture" is hoping that some of his thinking on topics like the minimum wage will rub off on peers in the group.

Mr. Tindell is known for supporting a raise in the national minimum wage, a position that conflicts with that promoted by the NRF. Earlier this year, a press release from the group described proposed legislation to raise the minimum as "an anti-job tax that would lead to higher labor costs for employers and fewer opportunities for young and entry-level workers."

Kip TindellIn an interview with Bloomberg News yesterday, Mr. Tindell said, "I’m working, frankly, to get the NRF to maybe moderate its view on that. It’s unbecoming to speak out against raising the minimum wage."

In response to Mr. Tindell’s remarks, NRF senior vice president Bill Thome, said, "We look forward to Kip’s continued leadership in facilitating the larger discussions on a myriad of complex challenges and opportunities that impact retail enterprises of all types and sizes. Diverse opinions and perspectives from NRF members are what make our industry strong and our advocacy efforts effective."

Mr. Tindell’s company is known for paying its employees well. In his new book, Uncontainable: How Passion, Commitment, and Conscious Capitalism Built a Business Where Everyone Thrives, Mr. Tindell writes that his company pays floor sales people 50 to 100 percent above the average for the retail industry, with full-timers making about $50,000 a year.

"Our people feel mildly tickled about their compensation," Mr. Tindell wrote. "Most businesses have people who don’t feel good about their compensation. And in the aggregate, the totals for those companies don’t look good either."

BrainTrust

Discussion Questions

Do you think more retailers and industry leaders will join Kip Tindell in supporting an increase in the federal minimum wage? What do you think Mr. Tindell will bring to the NRF in his position as chairman?

Poll

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Bob Phibbs
Bob Phibbs
9 years ago

Right guy to be leading the charge.

As I wrote in my post, “Can You Pay a Living Wage to Your Retail Employees?” the market is changing. You’ll pay the money somewhere else in the form of discounts or promotions so why not give it to the person most able to juice your sales. I’m sure I’m in the minority here but many of the bigger players are raising their minimum wages so I expect the better retailers to join Kip.

I hope Kip is able to bring his passion for training, rewarding and valuing his employees to elevate the status of working in retail via NRF.

Nikki Baird
Nikki Baird
9 years ago

I think that at a minimum (no pun intended) retailers are going to have rethink their store employee strategies. Omni-channel is forcing their hand: Unless the store experience is compelling and differentiating from the online experience, why should a retailer have stores at all? That old-school philosophy of trying to cut store labor costs and provide the minimum effort to training and retaining store employees won’t stand in the face of the convenience of online. I think Mr. Tindell has it right, that it’s easy to see that companies that pay well and treat their employees right tend to do well, and those that don’t, don’t.

Does that have to translate directly into some kind of policy objective regarding the minimum wage? I’d rather see the debate become moot—because we’ll have achieved a future where no one in retail, particularly in the customer-facing areas of the business, makes minimum wage to begin with. I wish Mr. Tindell all the luck and success in making an impact on the larger retail industry. It needs it.

Gene Hoffman
Gene Hoffman
9 years ago

More retailers and industry leaders will eventually support an increase in the federal minimum wage if federal reserve interest rates are raised and if inflation sets in. Otherwise it may just be good powerful rhetoric.

Ed Rosenbaum
Ed Rosenbaum
9 years ago

There is no better example of industry leadership than Kip Tindell and The Container Store. The Container Store has been one of the top companies to work for for more years than I can remember. They set the industry example, and Mr. Tindell has championed that leadership and growth. While his opinion might not be popular among his peers, they have to listen to him. Maybe they will understand what he did is something they can do. The growth and values The Container Store has are something the other retail executives should attempt to mirror.

Eric Dickerson
Eric Dickerson
9 years ago

Eventually yes. In order to improve the economy, demand for goods and services must be increased. This means making more money available to the majority of the population, not just the top. However, I suspect most companies will resist as it might reduce short-term profits, e.g., I work for a company that is willing to pay new hires 50 to 70 percent more than current employees, but will not give existing employees even a 1 percent raise in pay as in might reduce their profits.

Lee Peterson
Lee Peterson
9 years ago

I’ve seen Kip speak and read the Conscious Capitalism book and I would recommend either to anyone involved in retail. The premise is simple: In order to be a good company now, you should also be GOOD in every way. It’s fundamentally about creating relationships built on trust and subsequently taking care of each other in times of need. How could you NOT support that? Good to your people, good to your vendors, good to the community, good to the planet and on and on. What’s not to like?

But in terms of Kip affecting the rest of the retailers involved with NRF, he’s definitely got his work cut out for him. He’s an easy-going, clear-speaking nice guy that is effective on top of all that. But we’ll see if he’s got the energy and persuasive abilities needed to convince everyone else—who as a collective, are not like that at all—to become “good” companies as well. I personally will be rooting for him.

Cathy Hotka
Cathy Hotka
9 years ago

Amen, Nikki!

Gajendra Ratnavel
Gajendra Ratnavel
9 years ago

Increasing pay is an easy way to provide better customer service and improved productivity. It has diminishing returns unfortunately and your mileage may vary.

Lee Kent
Lee Kent
9 years ago

I think there is a big difference between defining a minimum wage and what a retailer pays. Excuse me for saying this but, who cares what the minimum amount is that you can pay an individual? The real question is how much is the job worth?

It’s time for retail to take a hard look at what they are doing in their stores. We are seeing and hearing every day how important the “experience” is. Well, any experience designer worth their salt will tell you the the design ALWAYS involves the employee along with the customer. Now what do you think that employee is worth?

Let’s not just assume that an entry level job is minimum wage. Let’s instead think about the value it brings.

… and, yes, that’s my two cents!

David Schulz
David Schulz
9 years ago

Big retailers may well support higher minimum wages if for no other reason than it will put more pressure on smaller retailers (and other smaller employers) who operate with less efficiency and therefore are less able to afford to pay employees more. The minimum wage is much more a political construct than an economic one. Minimum wage is a tool of organized labor, a form of price control—reverse price control, really, since it mandates a specific level of expenditure—on employers. When labor is abundant a minimum wage is arbitrary, if not capricious. When labor is scarce, a minimum wage is unnecessary.

Jerome Schindler
Jerome Schindler
9 years ago

I think the response from most will be “after you.” Retailers selling identical products (a can of Campbell’s soup is the same whether you get it at Kroger, Walmart, Target, the Dollar store, etc.) probably can’t risk raising their employee expenses unless their competitors do the same. My impression is that The Container Store, Costco and Trader Joe’s are examples of retailers that have successfully used higher wages to attract better and more productive workers. I am not sure that would work with retailers with huge numbers of locations, many of which are in areas/neighborhoods where you can’t seem to get good help at any price. I have often observed a significant difference in employee attitudes, etc., at retailers such as Kroger, Walmart and Target depending on the store location. I’ve noticed this at Bob Evans restaurants as well. I am sure that these companies’ managers realize this but it would be politically incorrect to say anything about it.

David Livingston
David Livingston
9 years ago

Some will support his view on minimum wage. Usually the retail CEOs that support it are those who already pay well and hire the cream of the crop of people. If minimum wage goes up, it doesn’t affect them but it does hurt competitors that require warm bodies only, like Walmart. It will mostly hurt retailers that employ the least qualified employees. There is a reason why some retail employees make $25 and hour and some only $8. It’s not because of the charity and goodwill of the CEO but rather the quality of the employee.

Gene Detroyer
Gene Detroyer
9 years ago

I know it is not reality nor does it make business model sense, but does it strike anyone else that is is somewhat demeaning to be payed a wage so low that you can’t afford to buy what they are selling?

But, back to economics. Adding dollars to the economy at the lowest level (national minimum wage is less than $15,000 annually for a full time job) gets into the economy very quickly, multiplies very quickly and ultimately returns through people buying more. We certainly can’t control what retailers that multiplier is going to affect, but somewhere it will come back around. It doesn’t matter if we are talking about groceries, shirts, TVs or automobiles, the stronger the economy at the lowest demographic levels produces the strongest and quickest results for retailers.

Mel Kleiman
Mel Kleiman
9 years ago

The quick answer is no.

If I could have a perfect world, companies and managers would recognize what Tindell is saying and figure out that when you help your people through things like higher wages, you get to be more selective. You also raise your own bar about who you hire.

If you pay peanuts, you most likely are going to hire monkeys.

Smart retailers already have raised their brand as an employer of choice by giving more.

David Harvison
David Harvison
9 years ago

Why do those on the left always run to government mandates to implement their preferences? If Tindell wants to pay more in his company, let him. Only 2.3 million workers are at the minimum wage, with nearly half being teen workers, the group with very high levels of unemployment.

Why should the government’s all-knowing, wise people set wage levels?

Craig Sundstrom
Craig Sundstrom
9 years ago

Why can’t all companies pay “50 to 100 percent above the average”? Oh, wait…

Back on topic, I think any support the NRF — or similar groups — offer in support of this idea will be a preemptive move designed to head off (even larger) increases at the state/local level. Although a Federal increase probably wouldn’t preempt the latter, it would take away much of the momentum driving them.

David Livingston
David Livingston
9 years ago

Today, I’m working in a market with Hy-Vee, Costco, natural food coops, Fareway, Aldi and Walmart. All of the grocers pay well over minimum wage, except Walmart. When we are talking about raising minimum wage, that is code for stick it to Walmart.

All of these higher paying grocers employ fit, good looking, quick on their feet, knowledgeable people. Walmart obviously hires people with various challenges. If we raise the wage bar on the lower paid workers, we are putting them out of a job. I think there is room in retail for all levels of employees. I fear a raise in the minimum wage would harm the people it is intended to help. And it only helps retailers and politicians who don’t need it.

I’m pretty sure Walmart would simply replace their disadvantaged workforce with people who are more capable. I’m not so sure service would improved because more work would be spread out among fewer employees, capable of handling more.

Ed Gilstrap
Ed Gilstrap
9 years ago

I’ll preface my comments by saying I love their stores. I also recall that their comp sales have been disappointing (falling) for a while. Their prices seem high to me and perhaps that is a contributing factor. Paying people way more than others may not be the secret to success.

On the other hand, I was at a meeting this week and in a small group we were asked to share a great experience at a retailer. Nobody could think of one for quite a while. Anyone that thinks the current model of paying associates as little as possible is working is out of touch.

The question of how much to pay associates is complex — there obviously isn’t a simple answer. If the minimum wage goes up, costs and prices will go up in response. The definition of poverty will go up. Our exports become more expensive and imports become more price advantaged than they are now. I don’t see how that moves anyone ahead.

Tony Orlando
Tony Orlando
9 years ago

Mr. Tindell can pay his workers whatever he chooses, but he does not walk in my shoes, or any other small business that does their absolute best every day to compete. I pay my staff pretty well, but the high school workers get minimum wage (call me cheap or crazy), as they develop the skills needed to move on to better things. The dollars to pay these wages in labor intense businesses, like fast food, would put the owner at risk of losing everything, and that is simply the truth.

Who doesn’t want to have the best workers at the highest pay and still show a handsome profit as well? The retailers I know are not greedy uncaring people. In fact, the opposite is true, as most try to help their employees and their community as best they can. As pricing gets sharper, and mandates to run stores increase, profits begin to shrink, and that is the current state of our economy in most areas of the country right now.

Add in the buying process, which is heavily tilted in Walmart’s and the Big Boys’ favor, and we are facing a much tougher time competing for the food dollar than in years past. So in closing I say do the best you can to help your workers and allow some profits to re-invest in making your stores better. Keep the government out of deciding what is best for business, or anything else, as they couldn’t manage a lemonade stand. One glass would cost $10.