Dive Brief:

• Stockholm-based Ikea Group next year will once again raise its U.S. hourly pay by an average of 10%, the company has announced. Last year the company raised wages an average 17% in the country.

• Starting last year, the retailer has taken the unusual step of using a “living wage calculator” based on one developed at the Massachusetts Institute of Technology that determines a living wage based on an area's cost of living. 

• Ikea also takes into account what it must pay in order to hire and retain good workers, the company says.

Dive Insight:

Last month, MIT professor Amy Glasmeier updated her “Living Wage Calculator,” which in turn prompted Ikea to revise its own rates, the company said. That, plus increased competition for good workers in an improving economy is leaving retailers with little choice but to offer better pay.

Lawmakers and worker advocates have been calling for raises to the minimum wage in many areas and for the U.S. as a whole, and several retailers have unilaterally boosted their minimums. Economists are consistently warning that stagnant wages for lower- and middle-income working people are keeping spending in check.

Plus, while physical stores have emerged as a crucial channel for sales and customer loyalty, it’s becoming clear that those stores must have well-informed, well-trained staff to make stores worthwhile for retailers and their customers.