Warnings re: minimum wage hike now a reality at Target

Friday, October 18, 2019
 | 
Michael F. Haverluck (OneNewsNow.com)

Target store front

After jumping on board with the progressive push across America to raise the minimum wage to $15 per hour, a major retailer is now facing the very issues about which critics warned.

"Target announced two years ago that it would raise the companywide minimum wage to $15 per hour by the end of 2020, winning plaudits from progressives and advocates for an increased minimum wage," TheBlaze notes.

"Now, with just one year before Target is scheduled to hit the magic $15 mark ($13 is the current minimum wage), it turns out that raising the minimum wage has impacted many Target employees in the exact way that opponents of mandatory minimum wage increases predict."

According to a CNN Business report, those impacts include reduction in employee hours and removal of employee benefits.

Employees short-changed

While a $15/hour minimum wage may sound good and look good on paper – at least to Democrats and other progressives – its negative effect on businesses and employees alike is often omitted from the debate. But CNN says layoffs are piling up for retailers as they maneuver to implement the problematic wage hike.

Even though Target claims its $13-and-climbing minimum wage is "building a stronger business," current and former employees with reduced hours and decreased benefits don't feel stronger or better off – but rather weaker and financially worse off. Workers with the retailer – on condition of anonymity – shared with CNN Business their predicament because of the $15 minimum wage hike.

"We're begging for hours," Desire, who works at a Target in Virginia, told CNN Business.

Heather, who began working for Target last November with 40 hours a week, now receives less than 20 some weeks. "I got that dollar raise, but I'm getting $200 less in my paycheck," she shared with CNN. "I have no idea how I'm going to pay rent or buy food."

And paychecks aren't the only problem for Target workers due to the minimum wage hike.

"Beyond just a drop in earnings that Target workers who spoke with CNN Business have experienced, employees who average fewer than 30 hours of work a week during the year aren't eligible to qualify for health insurance benefits through the company during annual enrollment season in the spring," CNN's Nathaniel Meyersohn explained. "Target offers health insurance benefits to eligible employees who average more than 30 hours a week, according to the company."

After averaging between 35 and 40 hours a week for about seven months, Caren Morales, who used to work at a Target in Diamond Bar, California, received a letter from the company in February about how to sign up to get health insurance benefits.

"Target worked me hard from mid-July of 2018 to February 2019 – right before my medical coverage was about to kick in," Morales told CNN Business. "They cut my hours right then, and so I begged for hours and always went above and beyond."

When Target slashed her hours to as little as 15 per week, she quit. "I called in on May 1 and said, 'I can't come in today or ever again because I can't afford my daughter's daycare," Morales recalled. "You guys cut me really bad.'"

According to the CNN Business report, a Target spokesperson would not discuss details about Morales' employment, but corroborated that her store "slightly" decreased its payroll and employee hours between 2018 and 2019.

Michael – who has worked at a Texas Target for years – had to find a second job when his hours dropped to between 20 and 30 per week – when he used to get up to 40 hours weekly.

"I'm hoping going to Christmas will keep me at the average needed [for health insurance], but at this rate who knows?" Michael told CNN Business.

Some employees in leadership positions blame modernization for the reduced hours, and several Target leaders in stores say workers' hours at their stores are continually falling. "Older cashiers were used to getting 30-some hours and they were getting less and less," one former store director told CNN Business, mentioning self-checkout.

Veteran employees are getting reduced hours – despite sales growth at their stores and nationwide. "We get fewer hours as a store," a department leader at a Target in Oklahoma said. "Most of [our] long-term team members have left."

One former department leader in a Colorado store said hours have dropped to lower than he's ever seen. "Some workers who had open availability were only getting four or six hours," Jack shared.

At the same time, Target keeps adding employees as it slashes current workers' hours. Chelsey, a Target department leader in Washington state, said her department has been adding new employees, cutting into existing workers' hours. "Hours have been cut because I have to add more people," she explained.

Heidi Shierholz, a chief economist for the Labor Department under the Obama administration, indicated to CNN Business that the wage hikes are problematic. "[If Target cuts back hours for some workers as it raises wages,] most workers aren't getting any more of what they really need," Shierholz said.

Tony, who works at a Target in Pennsylvania, said a higher hourly wage "really doesn't help much when [I'm] only doing 20 to 30 hours a week," adding that he now has to buy his food at a local dollar store and ask his mom to help pay his bills.

Comments from other Target employees interviewed by CNN Business suggest the move to cut hours has been detrimental to morale. One employee quit his job in Bloomington, Minnesota, after "out of nowhere" his hours were cut from 38 to 22 per week; another in Michigan – whose hours dropped to 30 per week to 19 in June – said many in his department left due to hours being cut "drastically"; and one in Maryland posed the question: "How are we supposed to be enthusiastic and happy if we're only working 19 hours a week?"

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