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T.J. Maxx to increase rate of pay

  • ASSOCIATED PRESS / 2009
    A customer walks past a T.J. Maxx store in Boston. TJX Cos., the owner of T.J. Maxx, Marshalls and HomeGoods stores, said Wednesday said it will raise the hourly wage for its U.S. workers to at least $9.
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NEW YORK » The owner of T.J. Maxx, Marshalls and HomeGoods stores became the latest retailer to boost pay for its U.S. workers, putting pressure on other chains to do the same.

TJX Cos. said Wednesday it will increase pay for its U.S. workers to at least $9 an hour starting in June. The announcement came a week after Wal-Mart Stores Inc. said it would increase starting wages for its U.S. employees to at least $9 per hour by April and by at least $10 by February 2016. Home furnishings retailer IKEA and Gap clothing chain also have raised pay recently.

John Challenger, CEO of global outplacement firm Challenger, Gray & Christmas Inc., said the moves could create a domino effect in which other companies follow suit in order to compete for top talent.

"Other retailers may have no other choice but to follow," he said. "The pool of available labor is starting to shrink and it will take more than a store discount to attract the best of available candidates."

The moves by the major retailers to raise wages come at a pivotal time when the plight of hourly workers has made national headlines.

Protests by fast food workers asking for higher pay have increased. Labor-backed groups have taken aim at Walmart, the nation’s largest private employer with 1.3 million workers, to start entry wages at $15 per hour. And President Barack Obama is endorsing a bill in Congress that includes a proposed increase in the federal minimum wage from $7.25 to $10.10 an hour, while several states are considering raising their minimum wages.

At the same time, there’s much national debate about what is a "living wage," or enough money for a worker to make in order to make ends meet. Most retail workers already make more than the federal minimum wage but not much more. In fact, more than half of retail workers make $10 or less, according to David Cooper of the Economic Policy Institute.

According to the most recent government data, the average that hourly retail workers in a nonsupervisory role earn is $14.65, but that includes people who work at auto dealers and other outlets that pay more than traditional retailers. The average hourly pay is $9.93 for cashiers and low-level retail sales staff, according to Hay Group’s survey of 140 retailers with annual sales of $500 million.

Whatever the major players in the U.S. retail industry decide to do will have a big impact on the job market as a whole. In fact, the industry supports one in every four U.S. jobs, representing about 42 million workers.

Still, the industry has mostly shunned the idea of higher wages. The National Retail Federation, which represents some of the nation’s largest retailers, is fighting Obama’s proposal, saying the financial burden could force them to raise prices or reduce workforce.

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