Perhaps this is the way it should be done to begin with. With many minimum wage workers and government leaders in Washington in America demanding a higher minimum wage Swedish furniture retailer Ikea is taking the matter into their own hands and will raise it own minimum wage. Ikea is also building in a cost of living adjustment that will be set according to different geographical locations.
All 38 U.S. locations as well new locations planned for Merriam, Kansas; Miami; and St. Louis will use the new wage structure.
The federal minimum wage is $7.25, though some states and cities pay more.
Starting in Jan 2015, the average U.S. Ikea worker will now earn $10.76 per hour. Ikea workers in Woodbridge, Va., will get the highest, at $13.22 an hour. Workers in Pittsburgh and West Chester, Ohio, will get the lowest, at $8.69. Ikea workers will on average earn 17% more once the increases are implemented.
In the past Ikea, has cultivated a reputation for fair treatment of its workers, evaluates its benefits plans every year and had always adjusted wages based on its competition. But Rob Olson, Ikea’s acting U.S. president, says the latest move shifts its approach. “Now, we decided to focus less on the competition and more about the co-workers,” Olson said in an interview.
Fast-food workers asking for higher pay in cities have staged protests across the country. Union groups have also held protests at Wal-Mart Stores Inc., the nation’s largest private employer. While Wal-Mart has yet to publicly endorse either raising the minimum wage or keeping the status quo, President Barack Obama is endorsing a bill that would raise the federal minimum wage to $10.10 an hour by 2016.
Many business groups have opposed the measure, saying it would hurt the economy and lead to job losses, while other are taking it on themselves to raise the rate. Gap Inc. said in February that it will set the minimum wage for workers at $9 an hour this year and $10 an hour in 2015.
Proof positive that government intervention isn’t the cure all for all things economic.
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