In its fourth quarter earnings announcement on Wednesday, TJX, which owns retail stores T.J. Maxx, Marshalls, and others, said it would raise base pay for all of its employees.
All full-time and part-time employees will be paid at least $9 an hour starting in June. Pay for those who have worked with the company for six months or more will start making at least $10 an hour “[s]ometime during 2016,” the release said.
In explaining the raises, TJX CEO Carol Meyrowitz said, “This pay initiative is an important part of our strategies to continue attracting and retaining the best talent in order to deliver a great shopping experience for our customers, remain competitive on wages in our U.S. markets, and stay focused on our value mission.”
The news comes a week after the country’s largest employer, Walmart, announced that it would be raising its lowest pay to $9 in April and $10 early next year. Other retailers have previously done the same: the Gap raised its lowest wages to $10 an hour and IKEA increased average pay to $10.76 an hour. Walmart and Gap both similarly noted that they were making the change to improve hiring and reduce turnover, which both said would improve their sales and finances.
All of these companies can rest assured that research has found that higher wages can benefit employers. A recent survey of existing research found that raises at major American companies reduce turnover, attract better job candidates, increase employees’ productivity and performance, and end up enhancing customer service. Another study also found that companies that increase wages benefit from improved recruitment and retention as well as improved efficiency because they can require workers to work harder.
Giving low-wage workers more pay can also increase sales. Lower-income Americans tend to spend most of their raises, pumping billions of dollars back into the economy and increasing demand for retailers’ goods.