Ikea to Hike Minimum Wage for American Workers

Though rates will vary based on the cost of living where each store is located, Ikea’s average minimum wage will be $10.76.

Ikea to Hike Minimum Wage for American Workers Photo (cc) by kaktuslampan

Ikea is raising the minimum hourly wage in its U.S. stores.

Beginning Jan. 1, the average minimum wage at Ikea will be $10.76 – a 17 percent increase to its current starting wage. But that rate is flexible, tied to the cost of living in its various store locations.

The Swedish furniture giant will base its minimum wage rates on MIT’s Living Wage Calculator, which factors in the cost of housing, food, medical care, transportation, and taxes. Ikea acting U.S. president Rob Olson told The Huffington Post that half of Ikea’s 13,651 employees will get a raise.

Olson said the lowest minimum wage will be $9 and the highest will top $13. According to the Los Angeles Times, Olson said:

The happier the co-worker, the happier the customer and the better the overall shopping experience. We wanted to be less concerned about the competition and more concerned about offering our co-workers a better everyday life.

Ikea said it will not raise its prices to help pay for the cost of increasing its minimum wage.

As the debate over raising the federal minimum wage continues, Ikea joins a growing group of retailers and state and municipal governments in instituting their own minimum wage hikes.

Earlier this year, Gap announced it was raising its minimum wage to $9 this month and $10 in June 2015. The Seattle City Council passed a $15-an-hour minimum wage in early June. So far in 2014, 38 states have considered bills to increase their minimum wage, the LAT said. Eight states and Washington, D.C., have passed new wage laws.

Do you think other retailers are going to follow companies like Gap and Ikea and raise their minimum wage? Share your thoughts below or on our Facebook page.

Krystal Steinmetz
Krystal Steinmetz
A former television and radio reporter, I stay at home with my two young children, run a small craft business and freelance for Money Talks News. I have a BA in journalism ... More


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