Dive Brief:
-
Ikea will change the wage structure for its U.S. stores based on each area’s cost of living, the retailer announced Thursday.
-
That will translate to an average minimum of $10.76 per hour, a 17% rise and more than the current U.S. minimum hourly wage of $7.25. The minimum at Ikea will range from $8.69 in some areas to $13.22 in others.
-
Stockholm-based Ikea said this new policy will increase the pay for half of its U.S. employees.
Dive Insight:
Ikea joins Gap Inc. in this decision to unilaterally raise its hourly minimums at a time when the topic is being much discussed and little-acted upon in Washington D.C. The Swedish furniture retailer already offers other benefits to its employees not found at many other U.S. retailers, including help with retirement savings.
While worker advocates are likely to hail its decision, retail expert Zeynep Ton, a professor at the M.I.T. Sloan School of Management, told the New York Times that the move is in the retailer’s interest. “Ikea is probably realizing that it’s hard to get the best out of their employees if their employees don’t earn enough to live on,” she said.
