February 26, 2015
TJX puts through a pay raise. Is Target next?
TJX Companies, the parent of T.J. Maxx, Marshalls, HomeGoods and Sierra Trading Post, is following in the footsteps of Gap Inc. (last year) and Walmart (last week) by giving its hourly workers a raise. The company announced plans yesterday to increase its starting wage to $9 an hour this year, moving up to $10 an hour for all associates who have been on the job at least six months at some point in 2016.
"At TJX, we attribute our success over the last 38 years primarily to the people we have hired who have remained focused on our mission of delivering consumers amazing values," said Carol Meyrowitz, CEO of TJX, in a statement. "This pay initiative is an important part of our strategies to continue attracting and retaining the best talent in order to deliver a great shopping experience for our customers, remain competitive on wages in our U.S. markets, and stay focused on our value mission."
TJX’s decision to grant raises to its hourly workers, as acknowledged by Ms. Meyrowitz, will likely be seen as a "keeping up with the Joneses" move. Many predicted that last week’s announcement by Walmart, in particular, would force other retailers to change their compensation levels. For its part, Target doesn’t appear as though it is ready to play. The company, which doesn’t publicly discuss what it pays its hourly workers, could be at a disadvantage in acquiring talent if better paying jobs are to be had elsewhere.
"It’s not that Walmart suddenly became benevolent," Russell Price, a senior economist at Ameriprise Financial, recently told the Star Tribune. "Wages are starting to percolate. To hang on to good employees, this is something they had to do. Target will, too."
While a lot of emphasis is being placed on the $9 starting point, notable retailers such as Costco, IKEA, Trader Joe’s and Whole Foods are already paying higher wages — sometimes significantly higher — for entry-level workers.
BrainTrust
Recent Discussions
Discussion Questions
Will $9 an hour become the effective minimum wage at retail over the next year? Do you expect wages to go even higher as competition increases for retail workers?
Poll
I think this is all just for the press release and that these wage levels have already been attained. These messages are code for if you are not worth $9 or $10 an hour, you won’t be working here. I do expect wages to go higher. Retailers, in my opinion, will start going for quality and not quantity in labor. While they may never get to the Costco or Trader Joe’s labor model, they realize that the warm body labor model is causing headaches both at store level and in public perception. No retailer wants internet videos poking fun at their workforce. Switching out lower-paid workers with fewer higher paid workers solves a lot of these problems.
A few thoughts:
1. Staff in stores today are more important than ever before to a retailer’s success … so pay them more when they’re worth it.
2. Paying someone minimum wage is actually insulting … what you’re essentially telling them is that if you could pay them less you would!
3. Finally, the days of corporations making millions while the ‘worker bees’ make peanuts are coming to an end. The ‘human’ thing to do is to pay staff more when they deserve it.
4. I’m no economist, but I tend to believe all those that are who continually say this increased pay rate will actually boost sales in the very stores who are paying it out.
Good for TJX and everyone else who is moving in the right direction.
All one has to do to understand the success higher wages and better training brings to a business is to look at The Container Store, Zappos, and Costco.
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I think this is all just for the press release and that these wage levels have already been attained. These messages are code for if you are not worth $9 or $10 an hour, you won’t be working here. I do expect wages to go higher. Retailers, in my opinion, will start going for quality and not quantity in labor. While they may never get to the Costco or Trader Joe’s labor model, they realize that the warm body labor model is causing headaches both at store level and in public perception. No retailer wants internet videos poking fun at their workforce. Switching out lower-paid workers with fewer higher paid workers solves a lot of these problems.
A few thoughts:
1. Staff in stores today are more important than ever before to a retailer’s success … so pay them more when they’re worth it.
2. Paying someone minimum wage is actually insulting … what you’re essentially telling them is that if you could pay them less you would!
3. Finally, the days of corporations making millions while the ‘worker bees’ make peanuts are coming to an end. The ‘human’ thing to do is to pay staff more when they deserve it.
4. I’m no economist, but I tend to believe all those that are who continually say this increased pay rate will actually boost sales in the very stores who are paying it out.
Good for TJX and everyone else who is moving in the right direction.
All one has to do to understand the success higher wages and better training brings to a business is to look at The Container Store, Zappos, and Costco.