Newspaper article The Christian Science Monitor

TJX Follows Wal-Mart's Wage Hike Lead: Will Retail Industry Fall in Line?

Newspaper article The Christian Science Monitor

TJX Follows Wal-Mart's Wage Hike Lead: Will Retail Industry Fall in Line?

Article excerpt

On Wednesday, retail workers who earn minimum wage got some welcome news. TJX, parent company of the T.J. Maxx, Marshalls, and Home Goods chains announced they were raising the base pay to $9 an hour.

This move followed on the heels of the decision this past week by the globe's largest retailer, Wal-Mart, to similarly boost its entry level pay.

With some 1.3 million workers in its employ, the Arkansas giant made this week's moves inevitable, says Scott Testa, assistant professor of business at Arcadia University near Philadelphia. "There is enough turnover in retail as it is," he says. "If your largest competitor raises its wages, you have to follow suit."

These moves within the retail sector come amid a growing demand for workers, increased competition from online retailers, and increased pressure from interest groups pushing for higher minimum wages. A growing number of cities and communities have raised the minimum wage locally, while others are pushing for a $15 federal minimum wage.

The pay raises suggest movement in a marketplace that has been moribund since the 2008 recession.

"We are five years out of the recession and only now are wages beginning to push upwards," says Chris Rhomberg, associate professor of sociology at Fordham University in New York. "Those chains can't continue to pay low wages and expect to get a stable work force," he adds.

Analysts suggest that the twin forces of social pressure to alleviate income inequality combined with an improved economy will continue to push retailers to raise entry level pay.

"We do hope this is a trend that will continue in this sector," says Aiha Nguyen, director of the grocery and retail project at the advocacy organization Los Angeles Alliance for a New Economy. She points out that others such as Gap have also begun raising wages.

Such moves make good business sense, says Ms. Nguyen. Retailers such as Costco and Trader Joe's have long paid higher wages and achieved a high level of employee loyalty and workforce stability as a result. …

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