The U.S. division of IKEA will raise the minimum wage for thousands of retail employees under an innovative new pay structure – but the move will have little impact on the Swedish furniture giant’s Richmond, B.C., location, where hundreds of employees have been on the picket line for more than a year.
IKEA U.S. announced this week that, effective Jan. 1, it will peg minimum hourly wages to the cost of living in each of the 38 existing U.S. retail locations, as well as three new locations that will open by the end of 2015. This will bump the average minimum hourly wage to $10.76 (U.S.) – a 17-per-cent average increase and $3.51 above the current federal minimum wage – and affect about half of IKEA retail workers in the United States.
Previously, the company based wages on the local labour market.
Anita Dawson, business representative for Teamsters Local 213, which represents about 300 employees at the IKEA Richmond location, said she found the news interesting.
“IKEA has never tied themselves to something like that before … they have always based [wages] on what other retail workers get,” Ms. Dawson said in an interview. “Now [IKEA U.S. is] looking at what real people have to deal with out there; that’s what the living wage was based on. If they’re looking at that, why can’t IKEA Canada look at that?”
She referenced an April report by the Living Wage for Families campaign that said the 2014 living wage rate for Metro Vancouver is about $20.10 per hour.
The IKEA Richmond workers have been on the picket line since May, 2013. The two sides – still far apart on issues including wages, benefits, management rights and guaranteed hours – have not met since mid-December.
In a statement, IKEA Canada noted that the minimum wage is lower in the U.S. and IKEA U.S.’s “groundbreaking move will bring the wages of IKEA employees in the USA well above the competition and more in line with their Canadian counterparts.”
IKEA Canada spokeswoman Madeleine Löwenborg-Frick said that half of the employees at IKEA Richmond – which the company has said is its poorest-performing location in Canada – make more than $18 an hour.
“Keep in mind that in B.C., the minimum wage is $10.25/hr,” Ms. Löwenborg-Frick wrote in an e-mail. “We believe that we offer a fair and generous wage.”
But Ms. Dawson said those figures are misleading as most staff are part-time and have no guaranteed hours. As well, under the employer’s proposed wage progression, some employees will “never, ever see that kind of money,” Ms. Dawson said.
Last year, the union expelled 35 members who crossed the picket line. In April, it filed an application with the Labour Relations Board asking to have the workers relocated or moved into management positions.
The employer, which claims the union wants the members fired outright, said it “equally supports our employees’ right to choose to picket as we do their right to choose to work.”
The labour board hearing is set to begin July 2.