NEW YORK, NY–Nationwide, companies have been shattering the minimum wage argument by providing their employees with higher wages and benefits. In South Dakota, Walmart employees are making $17.40 per hour, while Starbucks recently offered free tuition for some of their employees. Now Ikea has decided to join the trend, announcing last Thursday that it is raising the minimum wage for thousands of its workers in the U.S.
Rob Olson, Ikea’s acting U.S. president, stated the cost of living was a major factor in the decision. The company based its wage increase on the MIT Living Wage Calculator, which takes into consideration housing, food, medical and transportation costs plus annual taxes. Tell me why we need the government to protect us from being exploited by greedy corporations again?
Ikea already pays its employees above the minimum wage at $9.17 an hour, and has a reputation for treating their workers fairly. Every year, the benefits plans are evaluated, and wages were adjusted based on Ikea’s competition. Olson has decided to approach the situation differently, focusing less on the competition and more on “creating a better life” for their workers.
Olson believe the raise will improve the company’s relationship with employees, encouraging them to stay with company. Ikea already has a turnover rate well below the retail industry’s average, with about 19% of full-time retail workers leaving their jobs annually. After the pay increase takes effect on Jan. 1, 2015, the average wage will be $10.76 an hour. The raise will affect about half of Ikea’s 11,000 employees, with amounts varying based on location.
Many who object to raising the minimum wage argue that it will increase the price of goods and lead to massive layoffs, but Olson has taken measures to ensure that does not happen by cutting costs across several departments. National purchase programs are now being used to buy cleaning services and printer paper, rather than Ikea’s past method of using individual suppliers.
You may be thinking that the other half of Ikea’s employees are getting a raw deal, but fear not. All 38 U.S. locations, as well three planned locations, will adopt the new wage structure. The remaining employees are already paid above the local living wage, and Ikea has recently expanded additional employee benefits. An employee loyalty program was introduced last year, which makes contributions to a new retirement fund, and has increased the employer match to workers’ 401(k) plans. It also launched a unified bonus program.
Ikea has said it would welcome an increase in the minimum wage, given they’re already paying their employees so well. Yet unlike the federally mandated minimum wage, Ikea takes individual costs of living into their wage calculations, making for fairer distribution and happier employees.
[about_faith]
