With the U.S. economy awaking from its COVID-19 pandemic induced slumber, Target (TGT) is opening up its wallet pretty wide in an effort to retain — and attract — workers to meet a potential surge in consumer demand in stores and online.
The discount retailer said Wednesday it will permanently raise its starting wage for its store, distribution and headquarter employees to $15 an hour beginning July 5. Target says the move will impact 275,000 employees that work at its stores and distribution centers. The company raised its starting minimum wage to $13 an hour last June as part of a commitment unveiled in 2017 to reach $15 an hour by 2020.
In addition, Target will pay out a $200 bonus for eligible store and distribution workers by the end of July for their extra efforts amidst the pandemic. Target has been paying an extra $2 an hour in what has become known in retail as pandemic pay to workers since March. A Target spokesperson tells Yahoo Finance the pandemic pay will end as planned on July 4 after several deadline extensions.
Coupled with new health care benefits for workers revealed Wednesday including free access to virtual doctor visits, Target will have invested $1 billion more in its workforce this year versus 2019.
“In the best of times, our team brings incredible energy and empathy to our work, and in harder times they bring those qualities plus extraordinary resilience and agility to keep Target on the forefront of meeting the changing needs of our guests and our business year after year,” said Target Chairman and CEO Brian Cornell in a statement. “Everything we aspire to do and be as a company builds on the central role our team members play in our strategy, their dedication to our purpose and the connection they create with our guests and communities.”
Target isn’t alone in calling an end to pandemic pay as states reopen and some sense of normal re-emerges.
Kroger, Starbucks, Walmart and Amazon have all ended hourly bonuses for workers in recent weeks. Walmart has, however, paid out one-time bonuses in the same vein as Target to retain and thank workers. In mid-May, the world’s largest retailer said it would pay full-time workers a $300 bonus ($150 for part-time workers) on June 25.
The company has committed close to $1 billion this year in bonus pay this year.
Brian Sozzi is an editor-at-large and co-anchor of The First Trade at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
Read the latest financial and business news from Yahoo Finance
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, YouTube, and reddit.