Target to up hourly base pay to $15 by end of 2020
NEW YORK (AP) — Target Corp. is raising its minimum hourly wage for its workers to $11 starting next month and then to $15 by the end of 2020 in a move it says will help it better recruit and retain top-quality staff and provide a better shopping experience for its customers.
The initiative, announced Monday, is part of the discounter’s overall strategy to reinvent its business announced earlier this year that includes remodeling stores, expanding its online services and opening up smaller urban locations.
Target quietly raised entry-level hourly wages to $10 last year from $9 from the previous year, following initiatives by Walmart and others to hike wages in a fiercely competitive marketplace. But Target’s hike to $15 per hour far exceeds not only the federal minimum of $7.25 per hour but the hourly base pay at Walmart, the nation’s largest private employer, and plenty of its other retail peers whose minimum hourly pay now hovers around $10. As part of its $2.7 billion investment in workers, Walmart Stores Inc. had raised its entry-level hourly pay for workers to $9 in 2015 and then to $10 in 2016. With Target’s large influence in the retail, its hike could force some rivals to match the pay in order to compete.
“We see this not only as an investment in our team but an investment in an elevated experience for our guests and the communities we serve,” Brian Cornell, CEO of Target, told reporters on a call Friday.
Shares of the Minneapolis company fell 2 percent early Monday morning as investors worried about how much the wage hike would hurt the bottom line. Target reiterated its third-quarter and full-year profit guidance but said that it would update investors early next year about how higher wages will affect long-term profits.