IKEA Bumping-Up Minimum Wage, Benefiting Nearly 50% Of U.S. Employees
By Megan Zielinski, contributing writer
On June 26, IKEA announced that the average minimum hourly wage for U.S. employees will be raised to $10.76, beginning January 1, 2015 — an increase of $1.59 by 17 percent, at $3.51 above the federal minimum wage.
All 38 U.S. IKEA stores, along with the three new stores scheduled to open in 2015, will see the wage changes take place in the beginning of the New Year, affecting close to 50 percent of IKEA employees. This does not apply to the company’s non-retail employees working in five distribution centers, two service centers and manufacturing facilities as they already receive over the local minimum amount.
By using the MIT Living Wage Calculator, Ikea will adjust the new wage, considering each employee’s lifestyle, such as housing, transportation costs, medical expenses, food, yearly taxes, and cost of living in each location to fulfil the individual needs of each worker. “The transition to the new minimum hourly wage structure is not only the right thing to do, it makes good business sense. We are basing our wages on our co-workers and their needs, rather than what the local employment market dictates. Our focus is to ensure that IKEA is a great place to work by providing an environment that develops our co-workers and also meets our customers’ expectations. All of this contributes to our business success,” said Rob Olson, IKEA U.S. Acting President and CFO.
These advances in minimum wage will not increase the costs of IKEA products, as IKEA is dedicated to providing the lowest prices possible for customers, along with providing employees with the best working environment possible, living up to the company’s vision “to create a better everyday life for the many people.”
Ikea, major retailer known for their appealing, extremely affordable furniture and products, operates 305 retail stores in 26 countries, 38 being in the U.S. This new initiative is the most recent of improving the US employee experience — Ikea began the “TACK loyalty program” in December of last year, rewarding each employee working over five years at Ikea with a contribution to their retirement plan —“Tack” is Swedish for thank you. Just a few months before the Tack program was announced, Ikea launched the “One Ikea Bonus program”— a bonus system that honors hourly and salaried full and part-time workers when they reach their performance goals. “IKEA strives for long-term relationships with the people who are important to our success – our co-workers,” stated Mike Ward, IKEA US president.