With the holiday season approaching, this week Target became the first low-wage chain to announce it will raise pay to $15 an hour. Chief executive Brian Cornell said the decision to raise wages to $15 by 2020 will help Target attract and retain talent as the hyper-competitive retail sector enters its busiest quarter.
It also shows the growing impact of the Fight for $15–and puts pressure on other major players like Amazon, Walmart and McDonalds to follow suit.
Since striking fast-food workers launched the Fight for $15 in 2012, states and cities comprising more than 18 percent of the U.S. workforce—including Target's home city of Minneapolis—have approved $15 minimum wages. And scores of companies have raised pay to $15, including insurance giants Aetna and Allstate, major hospital chains across the country, and tech leader Facebook for its contracted bus drivers, janitors and security guards.
But Target's role as an industry leader in retail—which together with restaurants employs the largest share of workers paid less than $15–illustrates what business strategists have long argued: historically low-paying sectors can make the shift to significantly higher pay. MIT business professor Zeynep Ton has shown how industry leaders like Costco and Trader Joe's provide a roadmap for how investing in retail workers with good wages and benefits goes hand-in-hand with strong growth and productivity.