Target is an American retail giant that operates over 1,800 stores across the United States. The company has been in the news recently for its announcement that it would be raising its minimum wage to $15 an hour by the end of 2020. This wage increase would benefit approximately 275,000 workers, and is part of Target’s larger goal to invest $7 billion in its workforce over the next three years.
While this move is certainly commendable, some have criticized Target for not going even further. After all, Walmart – another retail giant – recently announced that it would be raising its minimum wage to $11 an hour.
And Amazon, which is often compared to Target, raised its minimum wage to $15 an hour last year. So why isn’t Target paying $20 an hour?
There are a few possible explanations. First, it’s worth noting that Target’s starting hourly wage is already higher than Walmart’s and Amazon’s.
Target pays $13 an hour, while Walmart pays $11 and Amazon pays $15. So while Target could certainly afford to raise its wages even higher, it may not feel the need to do so since its workers are already being paid more than workers at similar companies.
Second, Target may be worried about the potential cost of such a move. A $1 raise for all 275,000 Target employees would cost the company approximately $275 million per year. And while Target is a very profitable company, it may not want to commit such a large amount of money to wages at a time when it is making other investments (such as its recent $6 billion investment in technology).
Finally, it’s also possible that Target is simply waiting to see how other companies respond to the new wave of higher wages before making its own decision. After all, if Walmart and Amazon can successfully raise their wages without seeing a significant drop in profits, then Target may feel more confident about doing so as well.
So while we can’t say for sure why Target isn’t paying $20 an hour, there are a few possible explanations. Whatever the reason, though, it’s clear that Target could afford to pay its workers more – and hopefully someday soon it will.
