Another major retailer in the United States is giving a boost to its base salary, although the size of the increase will vary from state to state. On Thursday morning, the Swedish furniture retailer IKEA announced that it would be adopting a new wage structure which is expected to increase pay for about 50% of its American employees. The change in company policy will take effect on January 1, 2015.
The new policy will base entry-level compensation on the MIT Living Wage Calculator, which estimates the wages required “to meet minimum standards of living” in each county of each state. IKEA’s new compensation system will offer different base wages at different store locations, depending on the cost of living in the surrounding area. The average minimum hourly wage across all store locations will become $10.59, a 17% increase from what it is now.
Rob Olson, the acting president and CFO for IKEA US, told msnbc that the policy change “goes back to the IKEA vision, which is to create a better everyday life for the many people.”