Ikea raises hourly pay for US retail workers

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Associated Press

Posted on June 25, 2014 at 10:01 PM

Updated Wednesday, Jun 25 at 10:01 PM

NEW YORK (AP) — Ikea's U.S. division is raising the minimum wage for thousands of its retail workers, pegging it to the cost of living in each location instead of to local competition.

The raise, expected to be announced Thursday, will take effect Jan. 1. It will translate to an average wage of $10.76 an hour, a $1.59 increase from the previous $9.17.

The 17 percent raise marks the Swedish furniture chain's biggest in 10 years in the U.S.

About half of Ikea's 11,000 hourly store workers will get a raise. It will vary based on the cost of living in each IKEA location.

The move represents a big shift in approach. The company says it is focusing less on what rivals do and more on the needs of its workers.

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