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Retailers wrestle with wage issue

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NEW YORK — In the wake of Target Corp.’s decision to join Walmart in raising its minimum pay rate for hourly workers, other retailers, including chain drug stores, may face pressure to do the same.

Walmart Neighborhood Market checkout_featuredThe United Food and Commercial Workers International union reportedly plans to step up its efforts to organize workers at Walgreens Boots Alliance Inc. in a bid to boost pay for the company’s hourly workers. The UFCW has been aggressive in its calls for higher wages at Walmart and other retail chains, and has been encouraged by the recent announcements of pay hikes.

Walmart said in February that it would give pay raises to a half-million of its hourly associates, increasing its starting hourly wage to $9 per hour, which is at least $1.75 above the prevailing minimum wage. Walmart added that it will increase its minimum pay rate to $10 an hour in February 2016.

Following Walmart’s move, a number of other retailers have made similar announcements. In the last week of February, TJ Maxx, Marshall’s and HomeGoods announced that they would also boost their minimum pay to $9 an hour this year and to $10 an hour in 2016. And last month Target indicated that it would boost its mimimum wage to $9 per hour.

“Given the current momentum, we expect a faster chance of success in hiking minimum wage within the retail space, which includes drug chains, than say the fast food sector,” a UFCW spokesman told the Reut­ers news agency.

Reuters also reported that The New York-New Jersey Joint Board of Workers United, which is an affiliate of the Service Employees International Union, plans to start wage negotiations this summer with Walgreens’ Duane Reade chain.

The local union’s president, Julie Kelly, said drug chains are reporting “strong profits” that should allow for wage increases.

“That puts them in a position to lead here and raise the wages they pay,” Kelly told Reuters.

Union pressure is not the only factor that could eventually push drug store wages higher. Competition for workers in an improving economy could also prove to be a factor.

Walmart president and chief executive officer Doug McMillon attributed his company’s decision to raise wages to the need to ensure that it attracts the talent it needs. “The market works,” he said at the time.


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