Target to pay workers a starting wage of up to $24 an hour

A target store is seen on August 19, 2020 in Miami, Florida.
MIAMI, FLORIDA - AUGUST 19: A target store is seen on August 19, 2020 in Miami, Florida. Photo credit Joe Raedle/Getty Images

Target announced on Monday that it will start paying workers a minimum wage that ranges from $15 to $24,f depending on the type of position.

The retail store had previously set the minimum wage for all workers to $15 in 2020. The high end of the new wage raises applies to those in more competitive markets amid the ongoing worker shortage.

Target plans to spend an additional $300 million on its workforce this year, which includes more than 350,000 workers across 1,900 stores in the United States. The additional money will give hourly workers broader access to health care coverage.

Target hourly workers who work a minimum average of 25 hours a week are now eligible under the plan to enroll in a company medical plan, which is down from the previous minimum requirement of 30 hours per week, according to CNN Business.

During the holiday season, the company hit their goal of hiring 100,000 seasonal workers and 30,000 people in the supply chain network. Although, CEO Brian Cornell said in an interview with The Associated Press how the company needed to have a more localized approach to wages.

"The market has changed," Cornell said. "We want to continue to have an industry-leading position."

Other retail competitors have started to pay workers more than a minimum of $15 per hour, pushing Target to adjust their wage range.

For example, Costco raised their minimum wage to $16 and $17 for hourly workers in the fall. Amazon's minimum hourly wage for transportation and fulfillment jobs is $18 an hour, and they also have a $15 per hour minimum starting wage for all workers.

Walmart remains behind its rivals in regards to starting minimum wages, as they started to pay workers $12 per hour in the fall. They had set their minimum hourly wage at $11 per hour in 2018. Although, they did raise the minimum wage by at least a dollar for more than 565,000 store workers last year.

The average pay for retail workers, not including managers, jumped to $19.24 an hour in January. That's a 7.1% raise from the previous year, and bigger than the 4.2% raise from 2019 to 2020.

The current labor shortage going on in the retail industry has affected most stores. A recent survey by Korn Ferry showed that 96% of 100 major retailers said they were struggling finding new employees. 88% of them also said they have had trouble finding distribution-center workers.

The Federal Reserve Bank of Atlanta said that because of the current high demand for workers, the "pay among the poorest one-quarter of workers jumped 5.8% in January," per AP. That jump is double the increase of the highest-paid one-quarter of workers.

Featured Image Photo Credit: Joe Raedle/Getty Images