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IKEA Promises 17 Percent Wage Increase By End of 2015.

Jun 27 2014, 5:42am CDT | by

Swedish-based IKEA offers a minimum of $3.51 increase in wages for all retail outlets and distribution centers by the end of 2015.

IKEA Promises 17 Percent Wage Increase By End of 2015.
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IKEA Promises 17 Percent Wage Increase By End of 2015.

IKEA isn't concerned about keeping up with the Joneses. 

Acting president and chief financial officer Rob Olson says the company is raising employee wages in order to be "more focused on our co-workers and doing the right thing for them." 

In a press release put out by the company on June 26, Olson also announced “We are basing our wages on our co-workers and their needs, rather than what the local employment market dictates.”

Congress hasn't increased the federal minimum of $7.25 per hour since 2009—even as inflation continued to riser for most Americans, so the IKEA wage increase is vital.



Details focusing on the living wage for employees and co-workers are outlined in Huffington's Post contributor Dave Jamieson’s article "Ikea To Raise Minimum Wage For U.S. Workers With Tie To Living Wage Calculator.”

Increasing the average employee minimum wage to $10.76 per hour means the 17 percent raise will help approximately 13,650 U.S. employees. Olson notes focusing on the brand’s vision and philosophy of “helping the everyday life for the many people” includes co-workers. 

The Swedish-based company plans on using MIT's Living Wage Calculator for living minimum wages. This action would increase the wage up to $3.51 per hour for most employees, but the amount over will depend on geographic location. 

For example, a person working in Brooklyn (Kings County) may make $12.75 an hour, which is $5.50 above the federal minimum wage. Another person working in Round Rock (Travis County), Texas, would make $9.43 an hour. That's an increase of $2.18 per hour and an extra $87.20 for a 40-hour work week. Round Rock would still offer more cash to survive on. 

And that is the point, says calculator creator Amy Glasmeier. "I feel we're looking at the minimum living wage." Bare minimum based on inflation isn't great, but it's more than what many workers currently use to survive as the country slowly moves out of the Great Recession. 

While employees may compare notes on what they earn, the larger portion simply doesn't care. Olson suggests, "A co-worker in one market isn't concerned with what it costs to live in another market." It might be nice to make the same across the board, but right now any step above the lowest rung above poverty is a priority.

Since the end of 2013, President Obama’s pushed Congress to increase the minimum wage to $10.10 per hour in order to create a more balanced, growing economic system. However, constant political stalemate hasn’t pushed the government, even as families still teeter on financial collapse.



And IKEA promises to not raise prices for customers because of company philosophy. Nor is the business pushing any particular political agenda.

Wage increases will go into effect on Jan. 1, 2015 and by the end of the year will be implemented in all 38 retail outlets and distribution centers.

 

Source: IKEA, Huffington Post

 

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