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IKEA to Adjust Minimum Wage to Cost of Living

Ikea Agrees to Pay Their Workers More Than Minimum Wage

Kudos to IKEA. They are setting their new 2015 minimum wage according to the Living Wage Calculator from MIT.

But is the cost of living the only factor that should be used to calculate minimum wage?

Tying the concept of minimum wage to what you just need to make ends meet, isn’t the way we’ve always thought about the minimum wage. At one point in time in U.S. history, we actually saw the federal minimum wage increasing each year at the same pace as worker productivity…. It was a way to make sure that even the lowest paid workers were able to benefit from the economic growth that the economy was experiencing….

What you see now, between 1968 and today, you see this large divide between how productivity rose, which has more than doubled since 1968, and what you’ve seen happen with the minimum wage, which has dropped by 32 percent in value.

Jeannette Wicks-Lim, PERI Institute

Pay scales work off the bottom number. When the minimum wage increases, average wages adjust up, as well. There is no better way to boost our economy than by increasing the minimum wage. When workers earn more, they buy more. This increases demand, which in turn, creates jobs. In particular, the retail business sector stands to benefit greatly from higher wages.

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About The Author

JoAnn Chateau

JoAnn Chateau likes progressive politics and loves the canines. She writes fiction about an alpha Bichon named Chester, and his friends--with a dash of humor and a dab of poli-sci. JoAnn worked professionally in the Psychology and Information Science fields. Retired now, she enjoys the creative life.

3 Comments

    • JoAnn Chateau

      Retailers know that higher wages also boost the economy, which in turn stimulates consumers to buy more at their stores! I’m sure they hope businesses of all types will follow their example.

  1. Tanya

    That last paragraph makes perfect sense. More companies have to start paying their workers higher wages! It works out for everyone.

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