EDISON, NJ–Target Corp. is raising pay to at least $9 an hour for all its workers, starting in April, according to published reports.
Target’s choice comes after similar moves made by competitors such as Wal-Mart and TJ Maxx to increase pay for all its workers.
Although the retailer has not made an official announcement concerning the wage increase, Target store managers have reportedly been telling workers about the planned wage hike.
“The company doesn’t plan to announce the increase, though employees making less than $9 an hour should find more money in their paychecks soon,” wrote Paul Ziobro in the Wall Street Journal.
The company says that it does not disclose its wage levels.
Retailers don’t want their hourly workers to leave because it is costly to recruit and train new hires, according to experts.
“Target’s move is the latest example of a tightening labor market and rising competition for lower paid workers amid declining joblessness and signs that consumer confidence is returning,” wrote Ziobro.
According to a report from Bloomberg Business, “A modest bidding war has broken out among the retailers who hire from the bottom of the labor pool, buoyed in part by improving sales.”
The Bloomberg report asks this question: “Why are these big employers risking the wrath of investors by forking over more money to their least-valuable employees?”
The answer is that better wages prevent or delay workers from leaving, according to the report.
“Let’s say it costs you two days to train people and they stay for six weeks. If they stay for 12 weeks, you’ve halved the cost of training,” David Blanchflower, an economics professor at Dartmouth University, told Bloomberg, noting, in general, paying higher wages is not “due to a lack of people.”
As for its uppper-level employees, Target began firing thousands of workers on March 10, at its Minneapolis headquarters and announced on the same day that it was eliminating 1,700 jobs and leaving some 1,400 positions unfilled.
The Minnesota-based company employs more than 350,000 globally.
“Today is a very difficult day for the Target team, but we believe these are the right decisions for the company,” Target said in a statement.
“We know that to compete in this evolving retail environment, we must simplify how we work,” said the company. “We must reduce complexity and act with a greater sense of urgency.”
Target may be cutting jobs to recoup losses from its Canadian business, which reportedly lost more than $2 billion. CEO Brian Cornell announced in January that Target would be closing more than 130 Canadian stores.
There’s a Target store at 100 Parsonage Road in Edison, and 43 others throughout the Garden State, including a four others in Middlesex County: Milltown, South Plainfield, North Brunswick, and South Brunswick.