Target Corp next month will raise the minimum wage for all of its workers to $9 an hour, matching moves made by rivals including Wal-Mart Stores Inc and TJX Cos, a source familiar with the matter said.
The move comes in the face of pressure from labor groups and allies calling for a “living wage” at retailers and fast-food companies across the country, as well as the lowest unemployment rate in more than six years.
Target shares fell 1% in extended trade. The company has said it does not disclose wage levels.
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The clearest sign of the changing labor landscape came last month when Wal-Mart said it would move to the $9 minimum in April. Next year, employees with some six months training would be paid a minimum of $10 an hour.
A week after Wal-Mart’s announcement, T.J. Maxx and Marshalls owner TJX said it would match the $9 minimum in June.
Target Chief Financial Officer John Mulligan told analysts earlier this month that it was “not reasonable” to think in terms of a national minimum rate. Paying only $9 an hour in New York City or the oil-crazed economy of North Dakota would not attract any workers, he said.“Fixating on some single number to us, on an average number is unimportant. It’s about being competitive locally at a store level within a marketplace. That is important, and we’re going to be competitive,” he said.
But pressure rose on Target, which is competing for employees with Wal-Mart. Women’s advocacy group UltraViolet, for instance, recently ran a Web ad campaign that targeted devices located near three Target stores.
Banner ads read, “Did you know there’s a Walmart near you that pays higher minimum wage than Target?”
Meanwhile, the U.S. unemployment rate has fallen to 5.5%.
The Target wage raise, which was reported earlier by Dow Jones, will affect all 1,800 U.S. stores. The company already paid employees more than the federal minimum wage of $7.25 an hour, and it was not clear how many employees’ checks would be affected.