Though polls show broad public support for an increase in the federal minimum wage, political progress on the issue is non-existent. Congress’ Republican majority has ruled out the possibility of a wage hike, while a growing number of GOP presidential hopefuls suggest the federal minimum wage shouldn’t exist at all.
Outside the political realm, however, many Americans are getting a raise anyway. As we talked about last month, some of the nation’s largest retailers – Gap, Ikea, and Wal-Mart, among others – have already raised their company’s minimum wages, as did TJX, the parent company of T.J. Maxx, Marshalls, and HomeGoods.
Today, Target joined the club.
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.
It’s worth emphasizing that Target executives have not formally announced the change, so these reports remain unofficial, though the company has reportedly told employees about the wage hike, indicating it will take effect across all of its U.S. stories in the spring.
As we talked about after the TJX announcement, anytime there’s news of more Americans getting a bigger paycheck, it’s an encouraging sign of broader economic trends. But it’s even more heartening to appreciate the recent shift in the larger context.
As Danielle Kurtzleben explained after the Wal-Mart news, announcements like these from major retailers offer fresh evidence of an improved labor market.
After all, one of the closest-watched indicators in recent monthly job reports has been hourly wages. If those tick up, it’s a sign that the labor market is tightening, and that employers have to raise wages to hold onto or attract the talent they want. Last month, the jobs report showed that pay is already increasing, with average hourly wages jumping by 12 cents, the biggest jump in nearly eight years.Walmart’s announcement signals that the company wants to keep attracting good talent and doesn’t want to lose its workers to competitors – which in turn signals that there’s increased competition to get good workers.
There’s little doubt of the ripple effect in the competitive marketplace. The more major retailers look for an advantage, the more they want to recruit the best available employees to their enterprise. Wal-Mart made its move, which prompted TJX to act, which led Target to act.
I have a strong hunch some of my more conservative readers are shouting at the screen right about now. “See?” They’re saying. “The free market is working just fine. Legal mandates on wages are clearly unnecessary since the private sector is raising the minimum wage all on its own. Congress need not bother with an increase since national economic conditions are getting the job done naturally.”
It’s a nice argument and I wish I were persuaded by it. But the fact remains that the progress with these major retailers covers a lot of people, but not everyone. Many Americans continue to work at the federal minimum of $7.25 an hour, which is woefully inadequate. They need elected officials to act in order to receive a raise, and by all appearances, that’s not going to happen.
ThinkProgress, meanwhile, reports on the latest from Seattle, where the nation’s highest minimum-wage law is due to kick in next month: “[C]onservatives are warning that businesses are already shuttering under the pressure of higher labor costs and pointing to a recent report of a rash of restaurant closures as evidence. The problem is, the actual owners of those restaurants say that they’re not closing because of wages, and the city seems to be enjoying robust growth in that industry.”
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Target hikes minimum wages, joins a growing club