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Ikea Announces Plans to Raise Minimum Wage

  • Ben Feinstein
  • June 27, 2014
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via Mark Lennihan, File/AP Photo

The Swedish based furniture chain,  Ikea has planned to announce that it will be raising its minimum wage by 17 percent. Currently set at $9.17, Ikea will be raising their minimum wage to $10.76 starting January 1. The pay raise is expected to affect approximately half of the 11,000 employees working in the 38 stores across the U.S. Already almost two dollars above the minimum wage, Ikea seems to be one of the few companies interested in taking care of their employees.

IKEA President Rob Olson said, as reported by USA Today, “It’s driven from our vision of wanting to create a better everyday life for our coworkers.” He went on to explain that Ikea wants to give its employees a living wage based off the MIT living wage calculator. The pay raise, he reasoned, will grant Ikea a higher retention rate among its current employees as well as serve as a great recruitment tool.

Those who have argued against federal and state minimum wage hikes argue that employers will be forced to terminate employees or raise prices as a result. Ikea has claims that their higher minimum wage will not force the company to take either of those actions. Olson explained, “The wage hike will narrow profit margins, but it ultimately should benefit the bottom line.”

Ikea is not the only company to take up this new philosophy of paying workers a living wage. The Gap has also reported that they too will raise their minimum wage by January 1. The clothing retailer told Bloomberg News that they have experienced at least a 10% increase in job applications since announcing that they will raise their minimum wage to $10.

At least some companies out there willing to do the right thing. Despite what some giant conglomerates might believe, employees are real people who deserve to make a real living. It is great to see that some companies are willing to take the initiative to induce change without the foreboding heavy hand of the federal government.

 

 

 

 

 

 

 

Photo: via Mark Lennihan, File/AP Photo

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I love to travel, read, and explore. Life is short and I firmly believe in the pursuit of happiness over money. Please like and share as much as you can.

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