Target (TGT 4.98%) is taking bigger and more lasting steps toward boosting compensation for its employees. On Wednesday, the retailer announced that it has permanently lifted its base hourly pay and added new benefits and bonuses in response to the health and work pressures brought on by the COVID-19 pandemic.
New employees will now start at a minimum of $15 per hour, up from the prior $13 hourly minimum wage. Target is giving one-time bonuses of $200 for its store and distribution center hourly workers, too. It is making healthcare coverage easier to access without economic hardship in what the chain has called "a stressful year for the country."
"In the best of times," CEO Brian Cornell said in a press release, "our team brings incredible energy and empathy to our work, and in harder times they bring those qualities plus extraordinary resilience and agility."
All together, these moves will mean Target will spend about $1 billion more on its employees this year. That pressure helped push profitability down to 2.4% of sales last quarter from 6.4% a year ago. But Target is still seeing some of its fastest growth on record as consumers spend more on groceries and home furnishing and maintenance supplies.