Is retail finally starting to become more humane in the United States? It is not anywhere close to becoming a job that can lead to a decent middle class -- or even a lower-middle class -- lifestyle, but wages are starting to inch up.
Walmart started the ball rolling with its announcement last week that it will increase wages to $9 an hour. Now TJX Companies, the operators of TJ Maxx and Marshall’s, is the latest nationwide retailer to announce it will also give many of its workers a raise.
In a press release discussing its recent financial performance, the company announced it will raise the minimum wage for its employees to $9 an hour starting in June. That is a slight uptick from current wages, which now range from $8.25 to $8.50 an hour. By 2016, all employees who have six months’ tenure with the company will make a wage of at least $10 an hour.
So, why is the stubborn retail sector slowly changing its ways?
Part of the reason is simple economics. The labor market is actually tightening, with the U.S. jobless rate at a six-year low of 5.6 percent. Retail workers often struggle because even though most work only part-time, it is difficult to land a second job if your work schedule is all over the map. Even if an employee is working only 20 hours a week, that extra $80 or so a month (before taxes, of course) is nothing to sniff at. Workers will jump ship in a heartbeat, and as Costco has long proven, reducing employee turnover by keeping your workforce happy and loyal is a great way to keep costs down. And TJ Maxx’s executives seem to get it.
“At TJX, we attribute our success over the last 38 years primarily to the people we have hired who have remained focused on our mission of delivering consumers amazing values,” said TJX Companies CEO Carol Meyrowitz. “This pay initiative is an important part of our strategies to continue attracting and retaining the best talent in order to deliver a great shopping experience for our customers, remain competitive on wages in our U.S. markets, and stay focused on our value mission.” Happier employees mean customers will open their wallets even more.
Furthermore, as more consumers become more conscious about the stores from which they buy, low wages will continue to fester as a black eye within the retail sector. The employee strikes against Walmart were a constant public relations embarrassment, no matter what kind of spin the company tried to apply to its workers’ grievances.
Furthermore, despite the economic theories that are repeated to us many times over, higher wages can overall boost macroeconomic performance. After all, workers at all pay levels tend to do the same thing with their raises: They spend them. Take a look at Minnesota, for example: Despite a higher minimum wage and other economic policies that conventional wisdom dictates would kill an economy, the Gopher State currently has one of the best performing economies in the U.S. There are always exceptions, but a rising tide such as what is going on in retail can help lift more boats.
Image credit: Anthony92931
Based in California, Leon Kaye is a business writer and strategic communications specialist. He has also been featured in The Guardian, Clean Technica, Sustainable Brands, Earth911, Inhabitat, Architect Magazine and Wired.com. When he has time, he shares his thoughts on his own site, GreenGoPost.com. Follow him on Twitter and Instagram.
Leon Kaye has written for TriplePundit since 2010, and became its Executive Editor in 2018. He is also the Director of Social Media and Engagement for 3BL Media. His previous work can be found at The Guardian, Sustainable Brands and CleanTechnica. Kaye is based in Fresno, CA, from where he happily explores California’s stellar Central Coast and the national parks in the Sierra Nevadas. He's lived in South Korea, the United Arab Emirates and Uruguay, and has traveled to over 70 countries. He's an alum of the University of Maryland, Baltimore County and the University of Southern California.