Target to raise minimum wage to $11/hour, $15 by 2020

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TGT announced that it will be upping its minimum hourly wage over the next few years, increasing it to $11 starting next month and committing to $15 by the end of 2020.

In 2015, Target wouldn't promise to do the same after Walmart raised its minimum wage to $9 an hour at the time.

The investment will increase pay for Target workers across the USA before this year's holiday shopping season heats up and will also apply to seasonal employees.

Target said the moves are part of efforts to recruit and retain employees and provide better service to customers and communities.

The minimum wage increase is not expected to impact Target's third-quarter and full-year financial results.

The new Target minimum wage is about 50% greater than the federal minimum hourly wage of $7.25 and matches the minimum wages in MA and Washington, the highest in the country.

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The retail giant employs more than 300,000 hourly employees, both at stores and distribution centers.

The federal minimum wage is $7.25 per hour.

"Target has a long history of investing in our team members", said Brian Cornell, Target CEO and chairman. The urban minimum wage experiments, enacted in Seattle and San Francisco, have strained the local economies as small businesses, particularly restaurants, struggle to adapt.

However, it is much different for a private company to instill a minimum wage than it is for a city or a federal government. Democratic leadership introduced a bill in July to take the $15 minimum wage national, but the legislation failed to attract the requisite support to advance.

"They've got a broad, long-term problem because the labor market is tight and it's going to get tighter", Mark Zandi, chief economist at Moody's Analytics told The Wall Street Journal. The company will also hold hiring events at every store from Friday, Oct. 13, through Sunday, Oct. 15.