(Bloomberg)—Target Corp., No. 17 in the Internet Retailer 2018 Top 1000, is boosting its minimum starting wage for the third time in as many years, distancing itself from rival Walmart Inc. (No. 3) in a tight labor market.
The cheap-chic retailer will move to $13 an hour in June, providing tens of thousands of workers a raise, the company said, without specifying exactly how many staffers would benefit. This follows $1-an-hour increases in recent years and brings Target closer to the goal it set in 2017 of reaching $15 an hour by the end of next year.
“Investing in our team members is essential to keep our business growing and thriving,” Target’s chief human resources officer Melissa Kremer said in a company blog post.
The move is the latest salvo in an ongoing wage war between the nation’s biggest retailers. The industry is the largest private-sector employer in the U.S., and competition for staff has intensified.
Walmart has also boosted wages several times in recent years to reach its current starting salary of $11 per hour, and has also expanded benefits like maternity and parental leave. Costco Wholesale Corp., which often leads the retail pack on pay, just boosted its starting wage to as much as $15.50 an hour, while Amazon.com Inc. (No. 1) moved to $15 last year.
While the job market remains tight, there are signs of slack that could come back to haunt Target and others. The unemployment rate fell to 3.8% in February, but U.S. companies added the fewest workers in March since late 2017, according to data from the ADP Research Institute.
The downshift in hiring is the result of slowing economic growth and the waning effect of tax cuts, which Walmart and others used to help fund last year’s wage hikes. With that benefit gone, rising labor and transportation costs could crimp retailers’ performance this year, analysts have warned.Favorite