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Ikea's Minimum Wage Hike Was So Successful, It's Raising Wages Again

jet57

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Ikea's Minimum Wage Hike Was So Successful, It's Raising Wages Again

Ikea's Minimum Wage Hike Was So Successful, It's Raising Wages Again

WASHINGTON -- A year after it first announced a major minimum wage hike in its U.S. stores, Ikea said Wednesday that it plans to implement another nationwide raise to its wage floor next year, bringing the average store's starting pay to nearly $12 per hour.
Rob Olson, chief financial officer for Ikea U.S., told The Huffington Post that the company is already reaping dividends from its decision to hike the wage floor and to factor in the local cost of living in doing so.

"We're very pleased so far," Olson said.

So what types of benefits has Ikea seen?

For one, less turnover. 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.
"At both of those stores, the applicant pool was fantastic," Olson said.

So there goes the conservative assertion, “better your skills if you don’t want minimum wages”.

I told you guys that the wave was coming.


Happier and more responsible employees with better wages; who'd a thunk ti?
 
Ikea's Minimum Wage Hike Was So Successful, It's Raising Wages Again

Ikea's Minimum Wage Hike Was So Successful, It's Raising Wages Again



So there goes the conservative assertion, “better your skills if you don’t want minimum wages”.

I told you guys that the wave was coming.


Happier and more responsible employees with better wages; who'd a thunk ti?

It might be a wave of sorts. I saw something similar happen to stabilize and motivate the sales force by banks in London. Competition did the same and fluctuation came back and banking fed on other sectors for talent.
Don't confuse market decision making with the socialist desires just because they superficially seem similar.
 
Good. Swedish companies tend to have a more egalitarian attitude towards worker pay and the role of a corporation in general though, so no matter how high the "wave" of wage hikes are, Ikea is going to be towards the top.
 
Ikea's Minimum Wage Hike Was So Successful, It's Raising Wages Again

Ikea's Minimum Wage Hike Was So Successful, It's Raising Wages Again



So there goes the conservative assertion, “better your skills if you don’t want minimum wages”.

I told you guys that the wave was coming.


Happier and more responsible employees with better wages; who'd a thunk ti?

IKEA is basing it's future raise on 6 months of data on reduced turnover (employees leaving) because it's down 5%. Not really a sign of "success" yet. It would also behoove you to look at IKEA's financial statements.

IKEA pays less then 800m in euros (less then $1b) in corporate taxes on $29.3b euros (or $32.71b). Wal Mart pays about $8b in corporate taxes. ;)

Also IKEA has to be VERY VERY careful. US market only accounts for 3% of their revenue, while Europe accounts for 57%. Any massive change in currency exchange rates which would have the Euro fall closer to parity to the dollar, it would blow up IKEA's ability to pay the increased wages here.
 
Good. Swedish companies tend to have a more egalitarian attitude towards worker pay and the role of a corporation in general though, so no matter how high the "wave" of wage hikes are, Ikea is going to be towards the top.

IKEA isn't Swedish, hasn't since the 1970s when IKEA and it's ownership fled to Switzerland to avoid Swedish taxes. Today it's HQ in Netherlands and has a unique structure in which different parts are incorporated in Netherlands, Luxembourg, and Liechtenstein. Basically IKEA is registered as a charity in the Netherlands and pays only 3.5% in taxes. It's the worlds biggest tax fraud in the world.
 
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It might be a wave of sorts. I saw something similar happen to stabilize and motivate the sales force by banks in London. Competition did the same and fluctuation came back and banking fed on other sectors for talent.
Don't confuse market decision making with the socialist desires just because they superficially seem similar.

There are NO socialist desires here.

jeeez
 
IKEA is basing it's future raise on 6 months of data on reduced turnover (employees leaving) because it's down 5%. Not really a sign of "success" yet. It would also behoove you to look at IKEA's financial statements.

IKEA pays less then 800m in euros (less then $1b) in corporate taxes on $29.3b euros (or $32.71b). Wal Mart pays about $8b in corporate taxes. ;)

Also IKEA has to be VERY VERY careful. US market only accounts for 3% of their revenue, while Europe accounts for 57%. Any massive change in currency exchange rates which would have the Euro fall closer to parity to the dollar, it would blow up IKEA's ability to pay the increased wages here.

But US revenue is their market and by taking better care of their employees, Americans will be more likely to shop there.
 
But US revenue is their market and by taking better care of their employees, Americans will be more likely to shop there.

Why? I don't see a correlation between minimum wage worker base and sales traffic.

If Burger King changed their minimum wage to $20.00, would you start eating there as opposed to going to McDonalds, Wendys, Taco Bell, KFC, and the like?
 
Why? I don't see a correlation between minimum wage worker base and sales traffic.

If Burger King changed their minimum wage to $20.00, would you start eating there as opposed to going to McDonalds, Wendys, Taco Bell, KFC, and the like?

I might go in in there from time to time. I'd also tell the managers that I support the company taking better care of their people. In and Out Burger's starting pay has always been $10 an hour, so now maybe they will raise wages as well.
 
IKEA pays less then 800m in euros (less then $1b) in corporate taxes on $29.3b euros (or $32.71b). Wal Mart pays about $8b in corporate taxes. ;)

Yeah, but WMT is paying that $8B in taxes on $458B in revenue.

Ikea's effective rate is 2.75% while Wal-Mart's is 1.7%.

So the "burden" of "high U.S. corporate taxes" isn't really a factor here.
 
I might go in in there from time to time. I'd also tell the managers that I support the company taking better care of their people. In and Out Burger's starting pay has always been $10 an hour, so now maybe they will raise wages as well.

None of that translates to more foot traffic to grow sales. People who shop at Ikea are looking for cheap, self-assemble furnature(and meatballs). Cost of labor isn't going to change that, or your burger preference.
 
Ikea's Minimum Wage Hike Was So Successful, It's Raising Wages Again

Ikea's Minimum Wage Hike Was So Successful, It's Raising Wages Again



So there goes the conservative assertion, “better your skills if you don’t want minimum wages”.

I told you guys that the wave was coming.


Happier and more responsible employees with better wages; who'd a thunk ti?

The important change is that it's attracting more competent job seekers. I fully support a higher minimum wage and this is a good story. But you must understand, those people whose only skill is flipping burgers (metaphorically speaking) aren't going to be hired. IKEA has just raised the bar.
 
None of that translates to more foot traffic to grow sales. People who shop at Ikea are looking for cheap, self-assemble furnature(and meatballs). Cost of labor isn't going to change that, or your burger preference.

Well, In and OUt is consistently standing room only, so you're wrong there, and if IKEA wants the public kudos for raising wages and being a more responsible employer, who are to tell them "no"? Or "it won't work"? You're just being contrarian.
 
The important change is that it's attracting more competent job seekers. I fully support a higher minimum wage and this is a good story. But you must understand, those people whose only skill is flipping burgers (metaphorically speaking) aren't going to be hired. IKEA has just raised the bar.

Bingo: you get it.
 
Ikea's Minimum Wage Hike Was So Successful, It's Raising Wages Again

Ikea's Minimum Wage Hike Was So Successful, It's Raising Wages Again



So there goes the conservative assertion, “better your skills if you don’t want minimum wages”.

I told you guys that the wave was coming.


Happier and more responsible employees with better wages; who'd a thunk ti?

Perhaps you've already been corrected here jet57, but IKEA has proven that the better the skills, the higher the pay. The article states IKEA is attracting more qualified applicants with the higher pay, and the job pool for new applicants is better. This means those with fewer skills, and less to offer are likely not getting IKEA jobs because more qualified applicants are.

What IKEA is proving is they are willing to pay for more qualified candidates. As they should.
 
Well, In and OUt is consistently standing room only, so you're wrong there, and if IKEA wants the public kudos for raising wages and being a more responsible employer, who are to tell them "no"? Or "it won't work"? You're just being contrarian.

Let's say McDonalds steals the In & Out recipe catalog.

Would you get your exact same burger from IN & Out for $5 where the avg wage is $12/Hour OR do you get the same burger from McDonalds for $2 where the avg wage is $8/Hour?
 
But US revenue is their market and by taking better care of their employees, Americans will be more likely to shop there.

I know I'll be buying there because they pay $12/hr. :lol: NOT!
 
Let's say McDonalds steals the In & Out recipe catalog.

Would you get your exact same burger from IN & Out for $5 where the avg wage is $12/Hour OR do you get the same burger from McDonalds for $2 where the avg wage is $8/Hour?

I don't shop at ikea. There is a reason for that lol.
 
Well, In and OUt is consistently standing room only, so you're wrong there, and if IKEA wants the public kudos for raising wages and being a more responsible employer, who are to tell them "no"? Or "it won't work"? You're just being contrarian.
False correlation. People don't eat at In n Out because they pay their employees more.
 
False correlation. People don't eat at In n Out because they pay their employees more.

Why do you think the food is good and the employees are so good at what they do?
 
if a company wants to raise wages, cool. makes me a lot more likely to do business with them. as for the national minimum wage, i would tie it to inflation. making the minimum wage $15 everywhere would be counterproductive. what we should do instead is guarantee debt free access to college or to post secondary job training. if we did that, a lot fewer people would be stuck at minimum wage long term, and most of those jobs would be filled by high school and college kids trying to make some extra money instead of by people who are trying to raise a family.
 
Why do you think the food is good and the employees are so good at what they do?

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I hate my job. I make less than $15 an hour. My job requires more skill than working a fryer, grill, microwave, and telling customers the shake machine is broke so my lazy ass can go home before my shift is up. Sorry. You want better pay? EARN IT!

Go work at a temp agency and get more work experience. Go start a rival burger joint (everyone hates McDonald's anyway). Work harder and provide better service. I've had so many poor experiences at McDonald's...the last thing you can tell me is that they actually work hard enough to make more than most Americans.

You want my sympathy on wage hikes? Start with people who actually DO work hard and get paid way less. IKEA isn't a HORRIBLE start, because I'm aware it is a nicer store. But how about we start with more deserving jobs?
 
Why? I don't see a correlation between minimum wage worker base and sales traffic.

If Burger King changed their minimum wage to $20.00, would you start eating there as opposed to going to McDonalds, Wendys, Taco Bell, KFC, and the like?

There are a lot of people who choose to support business that treat employees fairly and refuse to shop at or limit shopping at places that don't treat employees well. Furthermore there are people who are fine paying a little more for better service. And on the whole companies who treat employees better have happier employees. And generally happier employees provide better service. People also tend to prefer businesses who's employees are knowledgeable. Lower employee turnover over time will lead to more knowledgeable employees. So there are benefits. Overall people will buy what is cheapest and don't care who gets trampled in the process because most Americans are greedy and selfish. So Walmart and the like will still have their core consumer base and will continue on screwing the world for their own pockets, but there is a significant number of Americans who value companies for their business practices and not just price.
 
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