IKEA Increases Wages of Lowest-Paid Staff

Discussion in 'Stock Market Forum' started by gracer, Jun 28, 2015.

  1. gracer

    gracer Senior Investor

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    IKEA follows Walmart in providing wage increase to their lowest paid employees as a move to prove that the company is a responsible employer. The move also aims to reduce staff turnover. Starting next year, the hourly minimum wage will be $11.87 from $10.76 which will be $4.62 above the current federal minimum wage. It will affect less than 1/3 of IKEA’s 15,000 employees in the US.

    Here’s a link on the report by Fortune:


    http://fortune.com/2015/06/25/ikea-raise-minimum-wage-living-wage/
     
  2. pwarbi

    pwarbi Senior Investor

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    When it comes to increasing the minimum wage, I'd like to see what sort of impact it will have on the overall figures at the end of the year.

    My guess is that it won't make much of a difference to the overall profit of the company.
     
  3. gracer

    gracer Senior Investor

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    When you look at the value of their recent minimum wage, it's still fairly low compared to $15 per hour which is supposedly the standard minimum wage in the US (correct me if I'm wrong). Anyway, the effort of the company is still much appreciated. At least their employees could somehow feel that the company is doing its part in trying to adjust to their economic situation.
     
  4. Sugarhill

    Sugarhill Guest

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    To be honest, I'm not that upset with them previously making $10.87, but I am glad they are receiving the increase. What they really need is comprehensive health care if they don't have that as those floors are murder on the back. Just walking around shopping can be a bear, I couldn't imagine an eight hour shift.
     
  5. Sunflogun

    Sunflogun Well-Known Member

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    Good measure from IKEA. I am all in favor that wealth can be distributed, even if it's in a minimal portion. They are making so much money that the least they can do is to pay accordingly to their staff.
     
  6. pwarbi

    pwarbi Senior Investor

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    Do people not think that a flexible minimum wage might help? Businesses as big as IKEA can certainly afford to pay the minimum wage, more in fact because if the amount of money they're making. For a small local business, that definitely not the case.

    Asking a small business to pay a minimum hourly rate could put that company out of business and it's also o be of the reasons they'd cutting peoples hours and only offering part time jobs.

    Could something not be put in place that alters the minimum wage to reflect the size of the company and how much money it makes?
     
  7. Rainman

    Rainman Senior Investor

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    In 2012 an inflation adjusted minimum wage would have been around $10.50. That's three years ago. An inflation adjusted minimum wage for 2015 would be much further from the accepted $8. So whether the wages have been raised or not, the workers haven't got a good deal but . . . that [the raise] is progress and it is good.
     
  8. petesede

    petesede Guest

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    Yeah, but that would just be exploited. Large companies would lobby congress, and there would be some loopholes and next thing you know multi-billion dollar companies are all classifed as ´small businesses´ and all paying the lower minimum wage.

    Two examples of where this happens already

    Farm subsidies for ´family farms´ ... which sounds great in political speeches, but family farms now include basically every farming company in the USA.

    The other one that really irks me is the small business aid that was offered to business affected by 9/11. Congress basically made it sound like a thing to help mom and pop stores, but then they allowed multi-billon dollar companies to break themselves up AFTER 9/11 and get the money. The amount of ´companies´ located in NYC tripled in the year after 9/11 because big real estate holding companies broke themselves up into tiny pieces so that each piece could quality for the free money.

    Anything like you mention where a company with less than 50 employees gets a bonus would just be exploited by very large companies meanwhile companies with 100 or 200 employees would get stuck paying the higher rate. Also, for franchises like fast food, they are mostly all small businesses anyway.
     
  9. Sunflogun

    Sunflogun Well-Known Member

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    Those considerations you make with the wages being adjusted to the inflation do make sense, except for the countries where wages have been decreasing in the last years, and there are some of those countries.
     
  10. pwarbi

    pwarbi Senior Investor

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    It seems that whatever law is put in place, it will be exploited one way or another. It's a case of just trying to find a plan that suits the majority but I still think a fixed minimum wage with no concessions isn't helping small businesses.
     

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