Under Armour is giving approximately 90 percent of its retail and distribution center workers a pay bump.
The athleticwear and footwear brand is raising its minimum hourly pay rates from $10 per hour to $15 per hour (or $15.25 CAD per hour in Canada), marking a pay raise of up to 50 percent for some workers. Taking effect on June 6, more than 8,000 part-time and full-time employees will see a compensation increase.
The decision comes as the federal minimum wage, currently $7.25 per hour in the U.S., remains a hot-button issue nationally. President Joe Biden has endorsed raising the national minimum wage to $15 per hour, although the proposal did not make it into the $1.9 trillion stimulus package for Covid-19 relief passed in March. On April 27, President Biden issued an executive order requiring federal contractors by 2022 to pay a $15 minimum wage to hundreds of thousands of workers who are executing federal contracts.
Major retail players such as Amazon, Costco, Target and Best Buy have already joined the $15/hour bandwagon. Earlier this year, Costco raised the minimum per-hour pay again to $16. Walmart CEO Doug McMillon has publicly displayed support for raising the federal minimum, but despite recent pay increases at the company, starting wages for many employees remains at $11 per hour.
And across businesses, Bank of America is going above and beyond, recently announcing it would boost its minimum wage to $25 an hour by 2025. The bank raised its per-hour minimum to $15 in 2017 and $20 in 2019.
The increase at Under Armour marks the beginning of several steps to enhance the employee experience, the company said in a statement. Within the coming year, Under Armour will implement additional measures in the form of compensation, learning and development and a new incentive plan for hourly workers, though details are scarce.
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“Our retail and distribution house teammates are the backbone of our business, and play an essential role in our ability to serve our Focused Performers,” Patrik Frisk, president and CEO of Under Armour, said in a statement. “We are committed to doing the right thing, and at the center of our commitment is ensuring our teammates feel valued and appreciated.”
Under Armour currently has more than 3,000 open roles in retail locations and distribution houses that would start at the $15 hourly rate, some of which are seasonal. The roles include sales associates, store managers and shelf stockers.
“At Under Armour, direct-to-consumer is one of our biggest growth opportunities and an area that I am proud to oversee,” said Stephanie Pugliese, president of the Americas at Under Armour. “Teammates in our retail stores and distribution houses are our strongest asset and we needed to make a strategic decision on our hourly wages to be a competitive employer in the retail space. We’re delighted to be able to raise our minimum pay rate and acknowledge the hard work of our frontline teammates in retail and warehouse, particularly over the past year.”
Pugliese’s description of the Baltimore athletic giant as a “competitive employer” comes at a time when many businesses are trying to find more ways to encourage people to return to work and offices. The federal unemployment rate ticked from 6 percent in March to 6.1 percent in April, and the number of unemployed persons totaled 9.8 million, according to the Bureau of Labor Statistics (BLS).
Retail actually lost 15,000 jobs in April 2020, following a 33,000 gain in March, the Bureau said. However, jobs at apparel and accessories stores rose by 10,000 in the month. In general, employment in retail trade overall was still 400,000 lower than in February last year.
Even amid increasing vaccination rates and job openings that increased 597,000 to 8.1 million across the U.S., labor participation has stagnated for numerous reasons. Job seekers might feel they have more leverage in finding a new position, while some may have fears about returning to a business setting as the Covid-19 pandemic subsides. Additionally, many argue that unemployment benefits may disincentivize some from returning to work.
The wage hikes come eight months after Under Armour laid off 600 employees, mostly corporate, as part of the company’s estimated $550 million to $600 million restructuring plan.