Target offers $24 an hour due to labor shortage

According to foreign media reports, workers in Target stores and distribution centers in New York and other places are facing the most intense competition in finding and hiring employees, and their starting salary this year may be as high as $24 per hour.

The new starting salary range is part of the company’s plan to spend $300 million more on its workforce this year , which also includes providing broader and faster health care services to its hourly workers.

It is understood that Target set a new benchmark for the retail industry as early as 2017 when it announced that it would increase its hourly wage to $15 by 2020. But the dynamics of the U.S. labor market have changed during the epidemic , and many employers are facing a serious shortage of workers. Many of Target's competitors now pay a minimum hourly wage of more than $15.

Target, which has about 1,900 stores and 350,000 employees in the U.S. , noted that its employee turnover rate is actually lower now than before the pandemic began . The retailer also said it was able to hire 100,000 seasonal workers in stores across the country and 30,000 seasonal workers in its supply chain network throughout the 2021 holiday season , exceeding its goal.

Many retailers say they are struggling to find workers. According to a recent survey of more than 100 major retailers with annual revenue between $500 million and more than $20 billion, 96% said they were having trouble finding store employees. A January survey by global consulting firm Korn Ferry also found that 88% said it was difficult to find employees at distribution centers.

Average wages for retail workers (excluding management) jumped 7.1% in January from a year ago to $19.24 an hour. In January 2020, retail worker compensation was up 4.2% from a year earlier. In January 2017, it was up just 1.7% from the year before.

But inflation has eaten up much of those gains, with consumer prices rising 7.5% last year, the biggest increase in four decades. Yet price gains were modest in the year before inflation spiked. In the past two years, wage gains have been more than enough to offset inflation, with workers, on average, receiving slightly higher wages adjusted for inflation, according to research from the Dallas Fed.

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