As COVID-19 changes the way stores operate, retailers are raising minimum wages for their employees.
Target set its hourly minimum wage at $15 in early July before committing $70 million in bonuses to hourly staff.
Wal-Mart is improving compensation for 165,000 workers in time for the holiday season, setting the hourly minimum wage at $17 for full-time store workers.
Plus, beginning on Dec. 14, Starbucks will increase pay for baristas, cafe attendants, and shift supervisors by at least 5 percent.
Retailers appear to be responding well to their employees’ demands, indicating signs of much-needed changes across organizational cultures.
Company culture at risk
After previously raising pay in 2019, Walmart and Target both came under fire for significantly cutting staff hours. At Target, the reduced hours stem from the company’s modernization efforts—a move that, for workers, results in less income per paycheck. Their corporate offices slashed payroll budgets for store managers, making it harder to schedule workers.
A recent survey of more than 500 Target workers in 44 states revealed only 12.7 percent of the workers who responded said they could survive on the wages from Target alone. What’s more, 56 percent of workers said they have experienced hunger while employed at Target, and 12.8 percent of workers reported experiencing homelessness.
Instead of embracing a rare opportunity to right a long list of wrongs regarding labor abuses, critics warn that retailers are running the risk of tainting their organizational cultures.
While no universally accepted standard for gauging company culture exists, it’s clear that the best ones successfully foster transparency, employee retention, and professional development.
Boosted brand images
Brand image can suffer immensely if a company refuses to acknowledge criticism for its work practices. For instance, Amazon’s human resources track record is alarming. The New York Times and the Wall Street Journal documented the e-commerce giant’s history with its toxic work environments. Severely underpaid staff avoid taking vacation days off out of fear. Unsafe physical conditions inside fulfillment centers put employees in danger. One site even saw 22 percent of employees suffer an injury.
Nevertheless, after Amazon announced a minimum wage increase back in 2018, it was considered a triumphant victory. Sen. Bernie Sanders went as far as praising CEO Jeff Bezos for the move:
“I want to congratulate Jeff Bezos for doing exactly the right thing by raising the minimum wage at Amazon and Whole Foods to $15 an hour,” said Sanders.
“Let me thank the hundreds of Amazon workers who contacted my office and the Fight for $15 movement, which has been leading this effort.”
Later on, Amazon briefly drew less criticism and received an opportunity to move forward as a brand. However, many of the same malpractices continued companywide, and more staff benefits were slashed. Still, the global retailer gained an advantage against competitors and leverage in lobbying efforts on Capitol Hill.
Amazon—along with Walmart and Target–have received criticism for playing on the majority of Americans’ stance on raising the minimum wage. As industry titans, all three are well informed on consumers’ growing preference to support socially responsible brands. Plus, they saw an opportunity to earn trust back from their respective employees.
But neither maintained sincerity in these efforts, and it is showing in this year’s holiday shopping season. Warehouse staff members at Walmart are struggling to receive hazard pay and consistent updates on COVID-19 test results among personnel. Essential workers at Walmart have died from COVID-19 this year. Although Walmart has issued several rounds of small bonuses to its employees, the payouts hardly compensate the risk workers are taking to keep shelves stocked and stores safe for shoppers.
Without ongoing measures put in place to protect workers and their paychecks, the retail industry’s culture takes another hit—just as stocks hit record-highs.