Target Raises Wages, Dollar General Adds Hours Not Dollars For Employers

By Christine Kern, contributing writer

As the battle over wages and healthcare coverage rages on, two retailers respond in different ways.

Last month, retail giant Walmart announced that it was raising the wages for 500,000 of its employees nationwide,  drawing attention to the issues of retail staffing from many quarters.  Other retailers also have already made the investment in its workforce, including TJMaxx, the Gap, and IKEA, but the move by Walmart was a seeming game changer for the industry.

Now, Target and Dollar General have each entered the discussion with their own unique solutions to the issue:  Target has announced that it is raising wages, while Dollar General is adding hours, rather than hiking hourly wages,  to its employees’  basket. 

Target announced that it is raising the minimum wage for its workers to $9 an hour, beginning next month, in an effort to keep its employees in one of the tightest retail labor markets in years.  Target employs approximately 347,000 individuals nationwide. 

“We make sure we’re competitive in every marketplace in which we do business,” Molly Snyder, a Target spokeswoman, told Fortune. “As part of that, we regularly and continually evaluate the marketplace to make sure our wages are competitive.”

The Wall Street Journal first reported Target’s wage increase. “We will increase wages in 2015, market by market,” Target CEO Brian Cornell said on March 3. “We will make sure we have increases, as we normally do.”

In response to the announcement of the Target raises, Marc Perrone, International President of the United Food and Commercial Workers International Union (UFCW), stated: ““A higher hourly wage for the hard-working men and women in retail is a first step in the right direction.”

But retailer Dollar General is taking a different approach to keeping its employees content.  Rather than hiking the hourly wage it offers, Dollar General will be offering more hours and smoother schedules to make life easier for its employees and to attract workers, according to The Guardian.

Chairman and CEO Richard Dreiling said the retailer is "comfortable" with its wage base, but will continue to assess it and raise pay if it deems that necessary. Dollar General operates some11,800 stores nationwide.

Getting enough hours and schedule flexibility has emerged as a retail labor issue that is as important, or nearly so, to retail workers as wages. Meanwhile, getting and keeping workers is getting more difficult for retailers. Dollar General is banking on enticing good workers with schedules closer to full-time, rather than higher wages.

The Wall Street Journal reported that about 12 percent of Dollar General’s part-time staff earn $7.25, the current federal minimum wage, while employees who have been with the company for more than five months can move up to $9 an hour. 

“In terms of what we’re paying, we feel pretty comfortable,” Richard Dreiling, chairman and chief executive of Dollar General, told the Wall Street Journal. “We’re going to continue to monitor the landscape and we’ll assess or make any adjustments that we need to make.”