Target is giving its workers a pay raise. As of October 2017, all of the store’s employees will make at least $11 an hour. The pay bumps won’t stop there. The company plans to gradually increase its minimum wage to $15 an hour by 2020.
Workers at the Minnesota-based discount retailer already earn more than the federal minimum wage of $7.25. In 2016, the company began paying every employee at least $10 an hour. The median wage for retail salespeople is $10.90 an hour, according to the Bureau of Labor Statistics.
A salary bump is welcome news for current Target workers, as well as the 100,000 employees it plans to hire over the upcoming holiday season. But the store isn’t handing out bigger paychecks just to be nice. There are some solid business reasons behind Target’s choice to increase its minimum wage so dramatically over the next few years. Here are eight good reasons why Target is giving workers a raise.
1. It needs to keep up with Walmart
There’s no bigger brick-and-mortar retail rival for Target than Walmart, with the two mega-chains battling not just for customers but also for employees. Walmart has made a big deal in recent years about raising its minimum wage to $10 an hour, and Target has raised its wages to keep up.
Now, Target is the one setting the pace for pay, issuing “the latest volley in a wage war,” according to Bloomberg. Offering workers higher salaries makes Target a more attractive employer than its biggest competitor. Plus, higher wages could help the store stand out from other retailers, as well.