Target Corp. TGT 0.99 % is raising the minimum wage for employees to $10 an hour, a person familiar with the matter said, as retailers face growing competition for lower wage workers.
The new hourly rate will match the minimum implemented earlier this year by rival Wal-Mart Stores Inc. WMT 1.16 % for most U.S. workers. Target boosted starting pay to $9 an hour in 2015, after a similar increase by Wal-Mart.
Target had 341,000 full time, part time and seasonal workers as of Jan. 30. News of the company’s latest pay increase was earlier reported by Reuters.
Target has resisted publicly commenting on introductory wages for its employees. Instead, company executives have said that Target pays competitively and adjusts wages based on the local market. For instance, in high-cost areas like New York and Los Angeles, starting hourly wages are already above $9.
“Our team is a huge part of what makes Target, Target,” the retailer said in a statement. “We pay market competitive rates and regularly benchmark the marketplace to ensure that our compensation and benefits packages will help us to both recruit and retain great talent.”
Retail is the largest private sector employer in the U.S., and competition for hourly workers has ratcheted up in recent months amid an improving labor market. Labor activists are also pushing for retailers to raise wages for hourly workers. Several municipalities and states have passed $15 minimum wage floors.
Wal-Mart started the wage war early in 2015, when it announced plans to raise wages to $9 an hour and follow it up with $10 an hour in February 2016. Wal-Mart also gave hourly workers a pay bump of at least 2% this February, a wage increase that affected nearly 1.2 million people.
The higher introductory pay rates have come with some challenges at retailers, with some longer tenured employees bristling at the fact that new hires now make an hourly rate that took them years to attain.
Paul Ziobro at Paul.Ziobro@wsj.com