Ikea increases American minimum wage

Ikea increases American minimum wage

Ikea will increase its American minimum wage 17 %, good news for about half of its American personnel. The Swedish retailer's move follows in the footsteps of GAP's similar action earlier this year.

At least 10.76 dollars per hour

From 1 January, Ikea employees in the United States will earn at least 10.76 dollars (or 7.9 euro) per hour, a 17 % increase. The wage increase is for all employees of its current stores (38) and its planned American stores (3). According to IKEA, nearly half of the store personnel will benefit from the move and it has also vowed this won't affect the plans to hire even more staff. Prices won't increase either to compensate for the increased costs.

 

It is not a sudden decision: a minimum wage increase has become a key issue for President Obama in by-elections and that is why he has asked Congress to boost minimum wages from 7.25 dollars (5.3 euro) to 10.10 dollars (7.4 euro). Republicans and certain business groups are fiercely resisting the proposed change. They feel this might lead to job losses and slow down the economy.

 

In Gap's footsteps

Ikea is not the first large American retailer that has voluntarily boosted minimum wages for its employees. Clothing group Gap Inc. had already increased minimum wages in February, to 9 dollars in 2014 and 10 dollars in 2015. Some 10,000 employees will benefit from the change this year and in 2015, some 65,000 Gap employees will have higher wages.

 

According to Gap, it will also benefit from the increased wages: "Our benefit is that we have become more competitive and more attractive in our fight to attract the best talent", Lynn Albright (vice-president and responsible for the Old Navy chain of stores) said.

 

Walmart and McDonald's, respectively the world's largest supermarket chain and fast food concern, have stated they would not resist a nationwide minimum wage increase, even though it remains to be seen whether they will stay true to their word.

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