Big chains are raising pay and more retailers are likely to follow
Home Depot and Starbucks announced plans to increase regular wages for associates. A potential hike in the federal minimum wage, recruiting benefits and hazard-pay reparation for working during the pandemic were cited as possible underlying factors driving the increases.
Home Depot said last week it planned to invest $1 billion annually on increased worker benefits while reporting third-quarter comps surged 24 percent amid a housing boom.
“We continue to lean into these investments because we believe they are critical in enabling market share growth in any economic environment,” CEO Craig Menear said in a statement.
Starbucks plans to give nearly all U.S. employees raises of at least 10 percent in mid-December. The hikes were revealed in an internal memo sent Nov. 2, the day before the presidential election, according to Business Insider.
“This announcement is the next phase of our commitment to ensuring the well-being of partners [employees] with one of the most significant investments to hourly pay in the U.S. in the history of the company,” Starbucks said in an emailed statement.
Multiple petitions have circulated online demanding Starbucks raise starting pay to $15 per hour as employees have been forced to adapt to the outbreak of the novel coronavirus. Many retailers have faced criticism for ending the temporary wage hikes and bonuses paid out early in the pandemic.
Target and Best Buy also increased their minimum hourly pay to at least $15 an hour this summer amid overall calls to raise minimum wage rates.
Florida recently voted to increase its wage floor over the next six years until it reaches $15 an hour. President-elect Joe Biden has proposed increasing the federal minimum wage to $15 by 2026, up from the current $7.25, although a Republican-controlled Senate, if it becomes a reality, is likely to fight an increase.
A Pew Research Center survey from last year found two-thirds of Americans support raising the minimum wage to $15 an hour, although many more Democrats (86 percent), than Republicans (43 percent), favored the hike.
A report from the Congressional Budget Office last year found raising the minimum wage to $15 an hour could cost 1.3 million Americans their jobs while raising the pay of 17 million others.
- The Home Depot Announces Third Quarter Results; Plans to Invest Approximately $1 Billion in Annualized Permanent Compensation Enhancements for Frontline, Hourly Associates – The Home Depot
- Starbucks is giving every barista in the US a raise, but some workers demand more as $15 minimum wage looms – Business Insider
- Starbucks raises wages for baristas as restaurant industry braces for minimum wage hike – CNBC
- Raise Starbucks Pay to $15 an Hour- coworker.org
- How Target’s Continuing to Invest in Team Members with $15 Starting Minimum Wage—And Much More – Target Corporation
- Best Buy Provides Updates on Evolution of Employee Pay and Sales Performance – Best Buy
- Should grocers keep paying their associates like heroes? – RetailWire
- Two-thirds of Americans favor raising federal minimum wage to $15 an hour – Pew Research
- CFOs Watch for a Possible Minimum Wage Hike Under Biden – The Wall Street Journal
- The Effects on Employment and Family Income of Increasing the Federal Minimum Wage – Congressional Budget Office
DISCUSSION QUESTIONS: What do you think is motivating Home Depot, Starbucks, Target and Best Buy to increase their wages for store associates? Do you see a potential $15 federal minimum wage as a positive or negative development for the retail industry overall, and how should retailers prepare for its potential arrival?