Target Raises Wages because of Market Pressure, not Politics

Should activists congratulate themselves when Target raises wages? Not much.

target dog

Target stores have announced that they are raising their lowest wage to nine dollars an hour. Since the story at the Wall Street Journal site is tucked behind a paywall, I have to rely on Newser.com’s summary: “Target Hikes Minimum Pay to $9.”

What is noteworthy about the Newser.com piece is that it submerges the substantial reason for Target’s decision in the midst of a great deal of verbiage designed to make you think that Target employees have social justice advocates to thank for the raises Target is giving out:

An ad campaign highlighting the fact that the pay is better at Walmart appears to have hit home at Target. The chain, which has been under pressure from labor groups and is facing more competition for low-waged workers, has announced that the minimum wage at all its stores will be raised to $9 an hour starting next month, reports the Wall Street Journal. The advocacy group UltraViolet recently ran an ad campaign that told people near the chain’s stores: “Did you know there’s a Walmart near you that pays higher minimum wage than Target?” reports Reuters.

There is no doubt that UltraViolet played a role in getting Target to raise pay, but the fundamental point here is that the group did so mainly by transmitting information. And what was that information? The information was about how you could make more working for Walmart than for Target. Target felt forced to raise wages because Walmart had decided to raise wages. It was market pressure, not politics or public opinion, that drove the change in pay scale.

In fact, according to Reuters, it seems that Walmart was the first domino to fall:

A week after Wal-Mart’s announcement, T.J. Maxx and Marshalls owner TJX said it would match the $9 minimum in June.

Of course, there is no reason to think that political activists will be satisfied with this improvement in wages.

The move comes in the face of pressure from labor groups and allies calling for a “living wage” at retailers and fast-food companies across the country, as well as the lowest unemployment rate in more than six years.

Nine dollars an hour is nowhere near a living wage. And we have no evidence that these retail stores could stay in business if they paid all their employees that much money.