Target Will Raise Its Minimum Wage. Here's Why That Matters.

"We care about and value the more than 323,000 individuals who come together every day with an absolute commitment to serving our guests."

On September 25, Target revealed it will raise its minimum hourly wage to $11 beginning next month, and also said wages will rise to $15 an hour by the end of 2020 — following in the footsteps of many city- and state-wide ordinances across the country that have already been announced.

According to the accompanying press release, Target feels this wage increase will allow it to continue to recruit and retain strong team members and maintain an elevated experience for its customers. "Target has a long history of investing in our team members. We care about and value the more than 323,000 individuals who come together every day with an absolute commitment to serving our guest," said Brian Cornell, CEO and chairman of Target. 

"Target has always offered market competitive wages to our team members," he added. "With this latest commitment, we'll be providing even more meaningful pay, as well as the tools, training and support our team needs to build their skills, develop professionally and offer the service and expertise that set Target apart."

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For Target employees (including the 100,000 hourly workers the big-box retailer plans to hire during the holiday season) this wage increase is a game-changer because, as the release points out, "a minimum hourly wage of $11 is higher than the minimum wage in 48 states, and matches the minimum wage in Massachusetts and Washington." The federal minimum wage is currently $7.25 per hour.

Per CNBC, a 2015 report from the Economic Policy Institute found that, no matter where they live in the United States, minimum wage workers earn far less than they need to live. Similarly, in early 2017, Bloomberg noted the U.S. cost of living increased in January by the most since February 2013. That increase was led by higher costs for gasoline and additional goods and services.

Though it's also important to note that the cost of living varies from state to state, higher wages, the EPI says, help the economy overall.

As BuzzFeed News points out, Target's announcement comes after companies like Facebook, Aetna, Amalgamated Bank, and Nationwide Insurance, have all "voluntarily set a pay floor of $15 an hour for employees." The hope is that other companies will continue to follow this lead, improving the lives of their employees and stimulating the American economy.

Cover image via Shutterstock / Jonathan Weiss.

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