America is getting another raise.
In its earnings announcement on Wednesday, TJX — which operates TJ Maxx, Marshalls, and HomeGoods stores — announced that it would raise minimum hourly wages for its full- and part-time hourly workers to $US9.00 beginning in June.
By “sometime during 2016” all hourly employees who have worked at TJX stores for more than six months will earn at least $US10 per hour.
TJX’s announcement follows similar news from Wal-Mart last week, the largest private employer in the US, that it would raise its minimum hourly wage to $US9.00 in April and $US10 by February 2016.
So, another huge win for American workers.
In a statement, TJX CEO Carol Meyrowitz said: “This pay initiative is an important part of our strategies to continue attracting and retaining the best talent in order to deliver a great shopping experience for our customers, remain competitive on wages in our U.S. markets, and stay focused on our value mission.”
But as we emphasised following the Wal-Mart announcement, the bigger story here is that the missing piece of the labour market recovery is finally becoming a reality.
In its commentary on the strength of the economy, the Federal Reserve has said that it is waiting for wage pressure to materialise as it looks to raise interest rates for the first time since 2006.
On Tuesday, Federal Reserve chair Janet Yellen said in prepared remarks on Capitol Hill, “However, the labour force participation rate is lower than most estimates of its trend, and wage growth remains sluggish, suggesting that some cyclical weakness persists.”
The latest news from two of America’s biggest retailers, however, suggests that on the wages front, things seem to be changing. The labour market has appeared tighter when you look at indicators like the JOLTS report, which showed a significantly increased number of job openings in the second half of last year.
Another stat that employers in the retail space can no longer ignore is the increasing quit rate in the industry — which we highlighted following Wal-Mart’s announcement — making clear that retail employers need to raise wages or see employees walk out the door.
Workers also grew more confident at the end of last year that raises were coming.
In our latest most important charts feature, JPMorgan’s Michael Feroli highlighted this chart, showing that at the start of the year, the number of workers expecting raises was up significantly from its post-crisis trend.
For a chunk of workers in the retail industry, this has now become a reality.