U.S. retailer Target Corp. announced on Monday that it will adopt a minimum wage system that would increase starting pay for some employees by as much as $9 an hour, with the highest pay going to hires in the most competitive markets.
Target, which has roughly 1,900 stores and 350,000 employees in the United States, currently pays a universal starting wage of $15 an hour. It said in 2017 that its hourly minimum wage will be raised to $15 by 2020, becoming one of the first retailers to do so.
The Minneapolis-based discount retailer said in a Feb. 28 statement that up to $300 million will be invested in its labor force in the year ahead. The investment will include a new minimum wage that ranges from $15 to $24 and an expansion to health care coverage for team members.
“Our team is at the heart of our strategy and success, and their energy and resilience keep us at the forefront of meeting the changing needs of our guests year after year,” said Melissa Kremer, the retailer’s chief human resources officer.
“We want all team members to be better off for working at Target, and years of investments in our culture of care, meaningful pay, expanded health care benefits and opportunities for growth have been essential to helping our team members build rewarding careers,” Kremer added.
Many major retailers have been struggling with workforce shortages over the last few months, and some have countered this by increasing the hourly minimum wage for employees.
According to a recent survey of more than 100 major retailers with annual revenues between $500 million and more than $20 billion, 96 percent said they’re having trouble finding store employees. The survey conducted by global consulting firm Korn Ferry in January also found that 88 percent said it was difficult to find distribution-center workers.
The high demand for workers in the branch has recently pushed up pay for employees in other retailers such as Costco and Amazon.
Costco raised its minimum hourly wages for workers from $16 to $17 last fall. Amazon’s starting wage is $15 per hour, and the e-commerce giant’s nationwide average starting wage for jobs in transportation and fulfillment is $18 an hour.
Walmart remains a laggard: Last fall, it boosted its minimum wage to $12, from the $11 hourly base it established in 2018. Walmart also raised the hourly wages for more than 565,000 store workers by at least a dollar.
The Associated Press contributed to this report.