Macy’s Inc. raised its company-wide minimum wage to $15 an hour.
The wage hike applies to all new and current staff. Macy’s said Tuesday it had already phased in the $15-an-hour minimum across several markets and that it will achieve the new target nationally by May 2022. The retailer also said pay increases to the $15 rate was completed this past summer for all distribution center colleagues.
“Once all these investments are made, average base pay will be above $17/hour and average total pay will be $20/hour,” Macy’s said in a statement.
The retailer said it achieved greater than 99 percent pay equity across gender and, in the U.S., across race in 2021. It has adjusted pay, rolled out recognition programs, and added a flexible paid holiday.
“At Macy’s, Inc., our commitment to culture and employee engagement has never been stronger, and we are energized by a 90 percent engagement rate in our company-wide survey of our more than 100,000-colleague population,” said Danielle Kirgan, Macy’s Inc.’s chief transformation and human resources officer. “By investing in our colleagues’ education and financial well-being, we’re determined to make it possible for them to bring the best of themselves to work every day and to enable them to pursue their own aspirations within and outside of Macy’s, Inc.”
Beginning in February, Macy’s will also provide a debt-free education benefit program, investing $35 million over the next four years. The program will cover 100 percent of tuition, books and fees for a variety of options, and is available for all U.S.-based regular, salaried and hourly staff members. The retailer has partnered with education and upskilling platform Guild Education to build the program.
Employers have been under pressure to raise wages amid a labor shortage. The Conference Board’s Employment Trend Index for October rose to 112.23 from 109.68 in September.
“The increase in the Employment Trends Index suggests strong employment growth is in store over the next several months,” Gad Levanon, head of The Conference Board Labor Markets Institute, said. “We project the unemployment rate is likely to dip below four percent within the next six months and may reach the pre-pandemic low of 3.5 percent by the end of 2022. In other words, labor shortages may not go away. In such an environment, significant upward pressure on wages may become the new normal.”
Data from the Labor Department indicates that the third quarter saw the biggest bump in wages and salaries in about 20 years, up 1.3 percent on average.
While retail jobs saw huge losses in 2020 from furloughs when stores were temporarily closed at the pandemic’s outset, and from store closures when many retailers went bankrupt, retailers in general have been having a hard time filling positions. Some people aren’t returning to work out of fear of the pandemic, while Covid cases were spiking, and some face a lack of childcare options.
Companies have tried to fill positions by offering incentives like higher wages. The retail sector is no exception, and most wage gains have benefited lower-income workers.
Considered the largest private employer in the U.S., Walmart has said its average hourly wage is $16.40. In September, when it added 20,000 workers to its supply chain network, Walmart indicated that the average wage for its supply chain staff is $20.37 an hour. The company said it would pay 100 percent of the cost of tuition and books for staff.
Target raised its minimum wage to $15 last year, instituted five pandemic-related recognition bonuses, and added a number of Covid-19 benefits have since become permanent. The Minneapolis-based retailer awarded all frontline hourly full-time and part-time workers at stores, distribution centers and contact centers a $200 recognition bonus in July, and it too recently said it will offer U.S.-based full- and part-time workers a comprehensive debt-free education assistance program.
They’re not the only ones raising wages. Costco last month bumped its starting wage in the U.S. to $17 an hour. The membership club, which has a low turnover rate, has regularly raised pay. In February, it raised the hourly rate to $16, from $15 in 2019 and $14 in 2018.
And Saks Off 5th last month said it would raise the minimum base wages for hourly store associates in North America to $15 an hour. Hourly store associates were also given an appreciation bonus of $500. “The past 18 months have been like nothing we have seen before in retail and this increase in base pay is a testament to our associates’ collective commitment and dedication to our business,” Rob Brooks, president of Saks Off Fifth, said. “As we work toward creating the ultimate luxury off-price retailer, we are focused on investing in and attracting the talent we need to drive our business forward.”
The minimum wage standard for retailers was set by Amazon.com back in 2018 when founder and former CEO Jeff Bezos raised it to $15 an hour for U.S. workers following pressure from politicians and worker advocacy groups. This past September, the e-commerce giant set a new standard again when it raised its average starting wage to $18.