Hey Ikea and Gap, Your Raises Aren't That Great

Catherine Rampell: These 'baby steps' are fine, but we need a federal hike
By John Johnson,  Newser Staff
Posted Jun 27, 2014 12:27 PM CDT
Hey Ikea and Gap, Your Raises Aren't That Great
An Ikea store in Brooklyn.   (AP Photo/Mark Lennihan, File)

Ikea and Gap have been busy patting themselves on the back of late for raising the minimum wage they pay their workers. The self-congratulation is a little much given the "baby steps" we're talking about here, writes Catherine Rampell at the Washington Post. Ikea, for instance, says it will pay its US workers an average of $10.76 an hour, which sounds fine in comparison to the federal minimum of $7.25, but "averages can hide a lot." Ikea workers in, say, Ohio, will be well below that average. Gap, meanwhile, has raised its chain-wide minimum to $9.

Rampell writes that she's glad that "some companies are raising pay even a little," but these two examples still won't amount to much in paychecks, especially for an employee trying to raise a family. Meanwhile, much bigger players such as McDonald's and Walmart continue to resist even modest increases, despite arguments that bestowing raises could help the bottom line by reducing turnover. And that's the bigger problem. "If you can’t get McDonald’s to cave, good luck convincing mom-and-pop companies" worried about competition. It's time, then, for a national hike, writes Rampell. "Without raising the federal minimum to a reasonable level, and evening the playing field for all companies that employ low-skilled workers, businesses are stuck in a race to the bottom on pay." Click for the full column. (More Ikea stories.)

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