By Jose Cruz Roa
SACRAMENTO, CA- On Feb. 28, with over 1900 stores in the United States and employing over 350,000 workers, the Minneapolis-based retailer, Target, announced that it will be raising its starting wage to 24 dollars an hour for its employees in some positions. This increase in starting wage will also apply to hourly workers at supply chain facilities, headquarters, and discount stores.
In 2017, Target announced that it would raise its hourly wage to 15 dollars an hour by 2020. This has since set a new marker for several other retail corporations to follow as well. Large retail corporations such as Amazon have raised their starting wages to 15 dollars an hour. In 2020, Best Buy increased its hourly minimum wage to 15 dollars. Additionally, the largest United States retailer, Walmart, stated back in Sept. 2021 that employees who worked the front end of the store, food, and general merchandise units were expected to receive at least a dollar an hour increase to 12 dollars. The pay raise was said to cover over 500,000 Walmart employees.
“Over the past year, we’ve raised pay for approximately 1.2 million hourly associates in our U.S. stores, increasing our U.S. average hourly wage to $16.40,” Walmart CEO John Furner said. Walmart’s current average pay for associates is $15.25
In 2020, Target successfully increased its hourly minimum wage to 15 dollars. Although that will remain in place, Target has said that some employees will qualify for higher starting pay based on their roles and how competitive the wages are in the local market.
The increase in wages is a part of Target’s plan to spend an additional 300 million dollars on its workforce. Additionally, this investment, starting in April, will include expanding access to healthcare benefits for hourly workers.
Under Target’s new plan, hourly employees will be eligible to enroll in a company medical plan if they work a minimum average of 25 hours a week. This is down from its previous requirement of 30 hours a week. This will allow for faster access to 401(k) plans and employees will get comprehensive health care benefits three to nine months sooner.
“The market has changed,” said Target CEO Brian Cornell in an interview with The Associated Press. “We want to continue to have an industry-leading position.”
Target’s new plan comes amid an ongoing pandemic that has caused a worker shortage within the retail industry. According to the “State, Employment, and Unemployment Summary,” California and several other states had the highest unemployment rates in the country with 6.5 percent in 2021.
In a recent survey conducted by Goldman Sachs, many businesses showed their concerns with recent COVID-19 cases. For instance, 79 percent of business owners are concerned about the ongoing impacts of COVID-19 and the Omicron variant on their business. 71 percent have said that the recent rise in COVID-19 cases due to the new Omicron variant has negatively impacted their business’s revenue.
In terms of workforce challenges such as hiring and retaining workers, 87 percent of business owners who are hiring find it difficult to recruit qualified candidates for open positions. Additionally, 97 percent of those hiring say difficulty with hiring is impacting their bottom line.
“Alongside the health risks, uncertainty and stress of working during a pandemic, many service-sector workers continue to contend with chronically unpredictable and unstable work schedules,” according to a recent report from the Shift Project, a joint venture by Harvard University and the University of California, San Francisco.
Independent groups such as Target Workers Unite have expressed their opinions about the increase in hourly wages.
Adam Ryan, a Target team member and organizer with Target Workers Unite, was confused on how the money will be dispersed stating that “For some employees, the announcement has brought a sense of security. They’re not stipulating how many of us are actually going to get paid 24 dollars an hour, and I’m at 16 dollars an hour.”
“I’m in the South, and wages generally are going to be lower in the South,” Ryan stated. “So, it would be nice to hear who exactly is going to get that $24 an hour.” He continued, “I definitely think a pay increase is justified. But I would say, it needs to be $24 as an hourly base pay rate for everybody at this point, especially with cost-of-living, inflation, how unstable the markets are right now, and the supply chain issues.”
“Raising the starting wage to $15 doesn’t mean anything if our hours are cut. We are not interested in this race to the bottom retail executives are forcing us, workers, to go through for their benefit. We seek solidarity with all workers across corporate lines to raise our standards for the benefit of everyone,” says Target Workers Unite on their website.
Furthermore, Target workers are also claiming that they are not being compensated for what they deserve stating that, “we deal with regular disrespect from management, and face unsafe working conditions all as we deliver exceptional service our guests have come to expect in our communities.”
“We think it’s crucial that fellow Target team members and the general public recognize that the way things are now are unacceptable,” the group says.
“We need access to the same quality of healthcare and benefits that Brian Cornell, the rest of the Target executive board, and the major shareholders of Target Corporation have access to” states a member from Target Workers Unite.