Company will use regional cost of living to determine new wage floor at each U.S. store
WASHINGTON—Congressman Bill Owens responded today to an announcement that Ikea will raise the average hourly minimum wage of its workers to $10.76 an hour at its 38 U.S. stores. The new average minimum wage represents a 17 percent increase at the company.
“I applaud this decision by Ikea to join the growing list of large U.S. employers choosing to invest in their workforce,” said Owens. “Investing in the middle class is not just good for employees, it also drives economic growth by increasing demand and encouraging consumer spending that grows our GDP.”
Minimum wage levels will not be uniform across all stores and will instead be set according to the cost of living in the surrounding area. The current federal minimum wage is $7.25 an hour.
According to the New York Times, Ikea’s announcement follows a similar decision by Gap Inc. to set a $10 minimum hourly rate for its U.S. workers starting next year. That increase will raise pay for more than two-thirds of Gap’s 90,000 U.S. employees including at subsidiaries Banana Republic and Old Navy.
Rob Olson, Ikea’s CFO and acting president for the U.S., confirmed that the company was interested in investing in its employees. “We are of course investing in our co-workers. We believe they will invest in our customers, and they will invest in Ikea’s stores. We believe that it will be a win-win-win for our co-workers, our customers and our stores,” he said.
Earlier this month, The Wall Street Journal published a letter from Congressman Owens calling on U.S. employers to review the macroeconomic and business benefits of increasing the wages of workers. Owens also recently praised Starbucks for its decision to provide free online college education to many of its employees.