The popular furniture company IKEA made a prominent movie last year when they voluntarily raised their minimum wage in their United States stores. Sam Tabar said the company raised their $9.17 an hour wage to $10.76 per hour. It was almost exactly a year later the company has decided to raise their minimum wage yet again. The Swedish based furniture company will pay their hourly employees $11.87 an hour which is more than generous to say the least.
This is $4.62 above what the United States federal minimum wage standard is at $7.25 per hour. Market critics have noted that this is a major move for IKEA and a smart one among other tactics. IKEA has been expanding their stores on a global scale at an unprecedented pace. If the company can gain better public relations because of their decision to raise the minimum wage it will make the company look better to consumers overall. Last year’s minimum wage hike for the company helped lead a 5 percent decrease in worker turnover.
The hike also attracted better talent and management within the store. The IKEA Company was on the Fortune’s Best Companies to Work For list in the years 2006 and 2007. Even though the company has dropped out of the sought after list since then, the CEO and executives are hoping that this wage hike will put them back on the list among many other benefits.