CVS to raise its minimum wage from $11 to $15 an hour
The pharmacy company based in the United States has committed to raising their workers’ minimum wage to $15 an hour by next summer, CNN reports. As companies compete for workers in the current tight labor market by offering different perks, such as flexibility or bonuses, CVS are set to become the latest large US chain to make the same move. The company, which has nearly 300,000 employees, has committed to start increasing the wages for hourly workers this month and highlighted that around 65% of their hourly employees already earn more than $15 an hour.
“Attracting and retaining top talent across our businesses is critical as we continue to redefine what it means to meet people's health needs,” CVS CEO Karen Lynch, said. The pharmacy giant also accentuated that it had recently eliminated the previous high school diploma or GED requirements that were in place for most entry-level jobs. They are also looking into eliminating the GPA requirement for university recruitment in order to expand their labor pool.
Whilst such measures will undoubtedly widen the candidate pool, IZA World of Labor author Charlene Marie Kalenkoski highlights that minimum wages can reduce on-the-job training and thus impact youth’s lifetime income. “[M]inimum wages may not be the best way to improve the labor market situation of unskilled youth. While some working youth will benefit from increased current earnings, others will suffer from reduced opportunities and lower lifetime earnings. Delays in labor market entry and work experience will reduce lifetime incomes for youths who are unable to find employment because of the minimum wage,” she writes in her article.
Other companies who have increased their minimum starting wage include Amazon, Target and Best Buy. In recent months, companies with minimum wages below $15 an hour including Walmart, McDonald’s and Chipotle have also increased their wages. President Joe Biden supports the lifting of the federal minimum wage from $7.25 an hour to $15 but the proposal is still in Congress.
Read Charlene Marie Kalenkoski’s article The effects of minimum wages on youth employment and income.