In this photo provided by IKEA, employee Adrian Gonzalez, center, of Burbank, Calif., helps pump up the crowd waiting to enter the new IKEA store during grand-opening ceremonies in Orlando, FL (AP Photo/Phelan M. Ebenhack, IKEA)
In this photo provided by IKEA, employee Adrian Gonzalez, center, of Burbank, Calif., helps pump up the crowd waiting to enter the new IKEA store during grand-opening ceremonies in Orlando, FL (AP Photo/Phelan M. Ebenhack, IKEA)

A year ago, Ikea announced it was raising the average minimum wage in its stores to $10.59, based on local cost of living. Apparently it’s working out for them, because Ikea is announcing another raise, Dave Jamieson reports, to an average minimum wage of $11.87 and a minimum wage of $10.

That is a 15 percent hike over the company’s existing pay scale, and some workers will make more than $14 an hour.

The move follows a plan IKEA launched in January that bases employee pay on local cost of living. The policy ties wages to the MIT living wage calculator, and gave 15,000 U.S. employees an immediate raise.

Ikea isn’t just being nice here. IKEA says turnover rates have gone down and the quality of applicants has gone up since the plan went into effect. The higher wages are an investment that’s paying off:

Although it’s only been six months since the raises went into effect, Olson said Ikea is on pace to reduce turnover by 5 percent or better this fiscal year. Holding onto employees longer means the company is spending less on recruiting and training new replacements.

Ikea is also attracting more qualified job seekers to work at its stores, according to Olson. Pay for retail sales workers in the U.S. is generally very low, with an average industry wage of just $12.38 per hour, according to the Bureau of Labor Statistics. But Ikea’s average store wage is heading north of $15. After its living wage announcement last year, the company opened two new locations — one in Merriam, Kansas, and another in Miami — and the higher wages (and attendant publicity) likely helped the company lure more candidates.

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But yet, despite all the evidence from states and cities and businesses that have raised wages and done well, Republicans insist that it would be a disaster if Congress raised the minimum wage from $7.25 an hour.

Source: DailyKos and CNN

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