By Brendan Case | Bloomberg
Target plans to spend an extra $300 million on wages and benefits this year as the competition for labor heats up.
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While the lowest starting wage of $15 an hour won’t change, pay for new employees will range as high as $24 an hour depending on the job and the local market, Target said in a statement Monday. In addition, the retailer is expanding eligibility for health-care plans and speeding access to benefits.
Retailers have been ramping up wages as they struggle to fill positions at stores and warehouses in a tight U.S. labor market. Costco Wholesale Corp. raised its starting hourly wage to $17 last year. Walmart Inc. also boosted pay for new workers, although its starting wage of $12 an hour trails that of rivals by an increasingly wide margin.
In health care, Target will now offer medical plans to employees who average at least 25 hours of work a week, down from the previous requirement of 30 hours. Eligible workers will also be able to access health-care benefits three to nine months more quickly than before, depending on the job.
Target has more than 1,900 stores and more than 350,000 employees in the U.S. The Minneapolis-based company’s sales in fiscal 2021 are expected to total about $105 billion, according to the average of analyst estimates compiled by Bloomberg. Target is scheduled to report fourth-quarter earnings Tuesday.