As lawmakers fight over a $15 per hour federal minimum wage — which has remained at $7.25 since 2009 — a handful of big retailers have already started raising wages well above the current level, with some at $15 or above and others on the way.
In late January, Jay Carney, Amazon’s (AMZN) SVP of global corporate affairs, wrote a letter in support of the Raise the Wage Act that would incrementally raise the minimum wage to $15 by 2025. In October 2018, the e-commerce giant raised its minimum wage to $15 for all U.S. employees, though it also phased out its RSU grant program at the same time.
“Once we increased our starting wage to $15 an hour, the positive impact on employee morale and retention—and the surge in job applicants—was immediate. In fact, the month after we raised our starting wage, applications for hourly positions more than doubled. Employees who saw their paychecks increase told us that they had an easier time providing for their families and were able to spend on things like car repairs and home improvement projects. In short, the investments we made in our hourly employees were quickly transferred to local businesses and economies. And the ripple effect didn’t stop there. We were thrilled when several other major companies—including Target, Best Buy, and Costco—also increased wages to at least $15 an hour for their employees. We are hopeful that more follow suit,” Carney wrote.
At the time, Best Buy CEO Corrie Barry said the wage increase was part of “an ongoing evolution and investment” in compensation. During the earlier days of the COVID-19 crisis, Best Buy provided “appreciation pay” to hourly field employees. The wage hike replaced that program.
This week, Costco (COST) boosted its minimum wage by $1 to $16 an hour. During a recent Senate panel hearing, CEO Craig Jelinek made a case that it's important for employees to make more "than just $15 or $16 an hour." He added that Costco employees receive pay increases based on hours worked, with full-time employees seeing two pay bumps per year, while part-time workers see one pay increase in a year. Those bumps occur until employees reach the top of Costco's scale, which also increases each year.
Jelinek also pointed out that Costco employees receive two bonuses each year up to $4,000 combined. The average hourly wage at Costco, which includes those bonuses, is around $24, he said
"In the U.S., our employees average over nine years of service with the company. Over 60% of U.S. employees have five or more years with Costco, and over one-third have more than 10 years. We’re very proud of the fact that more than 12,000 of our U.S. employees have worked for Costco for 25 years or more. Again, we feel the experience level and loyalty of our employees is a significant advantage for our company,” he said at the time.
Last week, Signet Jewelers (SIG), the world’s largest retailer of diamond jewelry, announced it's raising its minimum wage for all U.S. employees to $15 per hour. The wage increase will take effect by the spring of 2022, covering both full- and part-time employees. Signet, the parent company of Kay Jewelers, Zales, JamesAllen.com, and Jared, employs around 22,000 people in the U.S.
In January, Starbucks (SBUX) CEO Kevin Johnson told Yahoo Finance that "roughly one-third" of Starbucks' retail partners in the U.S. now earn at or above $15 per hour. He expects all partners in the U.S. to be at or above $15 per hour in the next two to three years.
"[We've] always invested in our Starbucks partners and wage and benefits. That's a good investment to make because if we care for our partners and invest in them, they create that customer connection, and if customer connection scores go up, we know customers visit Starbucks more frequently. So, that is a very important investment," Johnson told Yahoo Finance at the time.
In a December letter to Congress calling on immediate bipartisan COVID-19 relief legislation, Johnson shared that the company provided catastrophe pay and service pay while stores were closed during the pandemic, without involuntary layoffs. Starbucks also boosted wages in December by at least 10% for all partners, the internal term for employees, Johnson wrote, adding that all employees already earn above the minimum wage.
In June 2020, Target announced a permanent pay increase with a $15 per hour starting wage for all U.S. employees stoa took effect July 5. Target first set its goal of reaching $15 in 2020 in September 2017 when the starting wage was $11 per hour. By 2019, the starting wage hit $13. During the Depths of the COVID-19 pandemic, Target implemented a temporary wage increase of $2 extra per hour.
Last month, Walmart (WMT), the nation’s largest private employer, announced pay increases for 425,000 U.S. store associates in the digital and stocking workgroups. The pay increase will take effect on March 13. In September, Walmart gave raises to 165,000 associates. The retailer’s supply chain associates already earn $15 or more per hour. After the latest pay hike, Walmart now has about 730,000 U.S. store associates, approximately half of its U.S. workforce, earning $15 or more per hour. According to the retailer, the average wage for its U.S. hourly workforce will now be at least $15.25 per hour.
At the Investment Community Meeting last month, Walmart CEO Doug McMillon said the retailer will raise its starting rate over time. The retailer’s starting wage is currently $11, up 50% from 2009.
“We’re obviously really well aware of what’s happening nationally with this discussion around $15. And I think that’s an important target, but I also think that should be paced in a way that’s good for the U.S. economy,” McMillon added.
Julia La Roche is a correspondent for Yahoo Finance. Follow her on Twitter.