Can retailers afford to keep paying associates less than $15 an hour?
Under Armour is the latest company to give its hourly retail workers a bump in pay.
The athletic brand will begin paying its hourly employees at least $15 per hour in the U.S. and Canada, a change that will impact 8,000 workers, according to CNBC. This will represent an increase of as much as 50 percent in some instances and will go into effect June 6. With 3,000 current open positions, the chain is planning other changes beyond the pay increase to attract talent.
Against the backdrop of a labor shortage, the number of big-name retailers paying hourly wages of $15 has continued to increase, although retailers were moving toward higher wages before the novel coronavirus pandemic.
Amazon.com and Costco currently pay employees $15 or more, according to Insider. Kroger touts its average hourly wage as having been $15 since 2019, a claim it made in response to Walmart’s February announcement of a wage increase for some workers.
Walmart’s move consisted of a wage hike to an average above $15, impacting 425,000 workers, according to NBC News. The region-dependent increases were slated to hit in March. The minimum starting wage for Walmart remains at $11. Target’s minimum starting wage, on the other hand, is $15.
Chipotle recently instituted a planned increase to $15 per hour for workers by the end of June, according to another CNBC article. McDonald’s announced a 10 percent pay increase at its U.S. company-owned stores and anticipates its average wage being $15 by 2024.
Starbucks and Home Depot are two other retailers that have recently made significant increases in their hourly wages.
While public interest groups were criticizing the federal minimum wage for being insufficient as far back as the early 2000s (when the wage was $5.15), the issue became more visible in the U.S. in the years leading up to the pandemic.
The federal minimum wage has remained at $7.25 since July of 2009, although President Joe Biden signed an April executive order that will raise the minimum wage for federal contractors starting January, 2020 from $10.10 to $15 and index it to inflation moving forward.
- Under Armour to raise hourly wages to $15 for more than 8,000 retail, distribution workers – CNBC
- Walmart to hike wages for 425,000 workers to average above $15 an hour – NBC News
- US labor shortage working against Biden’s economic goals – CNN
- Retail giants like Walmart, Amazon, and Kroger are firing shots over rivals’ minimum wages. Here’s who actually pays $15 an hour. – Insider
- McDonald’s raises hourly wages for company-owned restaurants – CNBC
- Big chains are raising pay and more retailers are likely to follow – RetailWire
- Minimum Wage – U.S. Department of Labor
- Report: U.S. rentals unaffordable to the poor – USA Today
- FACT SHEET: Biden-Harris Administration Issues an Executive Order to Raise the Minimum Wage to $15 for Federal Contractors – The White House
DISCUSSION QUESTIONS: What are the biggest factors hindering retailers’ current recruiting and retention efforts? Do you see paying a $15 an hour minimum wage becoming a necessity for retailers to compete in the labor market?