TIME Companies

Target Will Raise Minimum Wage to $9 Per Hour

Shopper Laura Steele leaves a Target store in Toronto, Ontario, Thursday, January 15, 2015. Target announced that they will be ceasing operations in Canada affecting about 18,000 jobs. (Photo by Kevin Van Paassen Bloomberg)
Getty Images Shopper Laura Steele leaves a Target store in Toronto, Ontario, Thursday, January 15, 2015.

The second largest retailer in the U.S. is following Walmart's lead

Target, the second-largest retailer in the U.S., will lift its minimum wage to $9 an hour in April.

The move comes just one month after Wal-Mart said it would raise its starting wage to $9 per hour this spring and $10 next year, giving around 500,000 workers a raise.

Though Target said it would not comment on employee wages, Dow Jones reported and Reuters confirmed the bump Wednesday.

The move will be cheered by labor groups who have been pushing the company to offer higher pay. Women’s advocacy group UltraViolet recently ran a web campaign that pointed potential customers towards competitors. One banner ad read, “Did you know there’s a Walmart near you that pays higher minimum wage than Target?”

Federal minimum wage has been $7.25 per hour since 2009. Democrats have proposed raising it to $10.10, but many Republicans believe it would be detrimental to businesses.

[Reuters]

MONEY Food & Drink

5 Reasons Why McDonald’s Will Win in 2015

McDonald's golden arches signs
Kristoffer Tripplaar—Alamy

McDonald's may not look so hot now, but it's in great shape to beat the market in 2015.

It’s so easy to kick a mustard- and ketchup-colored clown when it’s down, and McDonald’s MCDONALD'S CORP. MCD -0.7% has certainly earned the dissing.

It’s coming off of five consecutive quarters of negative comps, and lately it’s been blasted for everything from the quality of its grub to operational snags.

Instead of piling on, let’s take a look at a few of the things that either have been going right or should start to go right for McDonald’s this year.

1. Domestic comps are growing again

The market wasn’t impressed when McDonald’s announced that global comparable sales decreased 1.8% in January. It’s just something that the market has grown used to since the chain’s fundamentals began to slip in late 2013. However, the entirety of that decline was the result of fallout in Asia as a supplier scare in China and brand perception issues in Japan weighed on the overall performance.

The world’s largest burger chain held up better closer to home. Sales in the U.S. rose 0.4%, with an even better 0.5% year-over-year uptick at the register in Europe. Boo birds will argue this still means sales aren’t keeping up with inflation, but let’s frame this correctly. This is the first month in more than a year that McDonald’s has posted comps that are north of breakeven.

2. The new CEO could be a game changer

The Don Thompson era is coming to a close, and now the board is tasking Steve Easterbrook with turning the chain around as its new CEO. Yes, he’s an internal hire. That may not seem very exciting at a time when McDonald’s needs to think outside of the Happy Meal box, but he seems like the perfect candidate.

Easterbrook helped turn around the chain’s operations in Europe before moving back to head up the restaurant’s marketing department. He seems to have a firm grasp on the right message to woo back customers, and January’s bounce could be the first sign.

3. Higher wages could benefit McDonald’s

Consumer-facing chains are under fire for their low wages, and it wouldn’t be a surprise if we see restaurant operators start to pay more this year. This will naturally inflate prices, but McDonald’s may have a technological advantage in the form of automation.

McDonald’s and its franchisees have been investing in machines that perform many mundane tasks. Smoothie machines get going at the press of a button. Updated drive-thru windows have soda fountain carousels that sort out cups and fill them with beverages as they are ordered. Smaller chains can’t afford these high-tech automations, but it also means that McDonald’s will be able to get by with fewer employees in the future.

4. The improving economy will raise all chains

Have you noticed the drive-thru lane at your local McDonald’s getting longer in the morning? I have. With job creation on the rise again we’re seeing more rushed commuters hitting the road, taking lunch breaks, and having more money at the end of the day to take their families out to dinner.

This is a trend that should be beneficial to all chains. McDonald’s will be there.

5. The fundamentals are strong

McDonald’s may not seem cheap for a mature and slow-growing company. The stock is trading at 19 times this year’s expected earnings and a still steep 18 times next year’s target. However, there’s something to be said about a company with a predictable stream of fat royalty payments from franchisees. Net profit margins at McDonald’s hovered around a juicy 20% for several years before last year’s stumble, according to S&P Capital IQ data.

Along the way we have a company donning a chunky yield of 3.5% with a history of annual hikes dating back to when it started paying out dividends 39 years ago. McDonald’s may not look so hot now, but it’s in great shape to beat the market in 2015.

TIME cities

Seattle Bus Fares Are Now Based on Your Income

Mass transit officials have long offered discounts to certain commuters—seniors, veterans and government employees, to name a few. On Sunday, Seattle added people from low-income households to the list.

Under a new program, commuters with household incomes less than two times the federal poverty line pay only $1.50 for most trips on the region’s buses, light rail trains and street cars. The county estimates that the program could save workers who commute during peak hours more than $900 per year.

Seattle, like cities across the country, has seen a growing income gap between its highly-educated residents with high incomes and poorer residents. The commuter program is one of many efforts to assist those on the lower end of that spectrum. The city’s highly-publicized $15 minimum wage, another such effort, takes effect in April.

 

TIME Business

Walmart’s One-Time Claim to Fame: Employee Morale

Andy Wilson
Alan Levenson—;The LIFE Images Collection/Getty Wal-Mart regional VP Andy Wilson (L) giving a pep talk on corporate values at a Wal-Mart store, in 1992

On Thursday, the company announced a plan to increase wages for some employees

These days, Walmart is such a powerful company that this week’s news that it will give employees a raise could potentially change the minimum-wage landscape nationwide.

In 1983, when TIME first profiled the company, many readers might not have even heard of it. Though Wal-Mart was already the ninth-largest retailer in the nation and had raked in $3.4 billion the previous year, it had locations in only 15 states.

And the size of the operation — it now operates in 27 countries — isn’t the only thing that has changed. The news about the Walmart minimum-wage hike has been tied to an ongoing campaign for the rights of workers; like the fast-food industry, the company has acquired a reputation as a place where low-level employees aren’t paid enough. In 1983, however, employee happiness was said to be one of the company’s strengths:

Wal-Mart’s 50,000 employees, called “associates,” share in the company’s profits, earn bonuses for reducing shoplifting or suggesting merchandising ideas. “Their morale is fantastic,” says one Wall Street admirer. Each Saturday morning at 7:30 in the headquarters auditorium packed with new merchandise samples, “Mr. Sam” holds meetings with buyers and managers. Walton plans to continue expanding rapidly. The company will open more than 100 stores next year. At that sizzling pace, sales by 1987 would hit $10 billion. That would put Wal-Mart in a position to challenge K mart as the king of the discounters.

Read the 1983 story, here in the TIME Vault: Small-Town Hit

TIME Executives

Starbucks CEO: Giuliani’s Obama Remarks ‘Vicious’

Howard Schultz
Chip Somodevilla—Getty Images Starbucks Chairman and CEO Howard Schultz participates in a forum in Washington on Nov. 10, 2014.

The outspoken chief executive responded forcefully to the former New York mayor's comments

Though he recently told TIME he has no personal political ambitions, Starbucks CEO Howard Schultz hasn’t stopped stepping into the political fray.

On Friday, Schultz issued a statement lambasting former New York Mayor Rudy Giuliani for Giuliani’s recent declaration that President Obama doesn’t love America. The comments were “vicious” and “profoundly offensive,” Schultz said.

Politico reported that on Wednesday, Giuliani was speaking at a private dinner for Wisconsin Gov. Scott Walker when he said: “I do not believe, and I know this is a horrible thing to say, but I do not believe that the president loves America. He doesn’t love you. And he doesn’t love me. He wasn’t brought up the way you were brought up and I was brought up through love of this country.”

Schultz issued the following statement: “As an American, I find Rudy Giuliani’s vicious comments about President Obama ‘not loving America’ to be profoundly offensive to both the President and the Office.”

A Starbucks spokesperson on Friday morning said: “We are not providing any additional commentary around it.”

Schultz doesn’t hesitate to weigh in on political issues. In December, he raised some eyebrows when he addressed the shootings of black suspects by police offers. During an Open Forum at the Starbucks Support center in Seattle, he encouraged employees to talk about their own experiences with racism He released a video of that event, and, in a letter sent exclusively to TIME, he expressed his dismay over the situation. “I’m deeply saddened by what I have seen, and all too aware of the ripple effect,” he wrote.

Schultz has often decried the political gridlock in Washington. He has also addressed the federal minimum wage, now at $7.25 an hour. On that issue, he tends to be circumspect. Starbucks pays more than the minimum wage and offers healthy benefits packages. Schultz supports raising the federal minimum, but he has said that raising it by too much—say, to $15 an hour, as some activists have demanded—would put a crimp on businesses, and lead to lower benefits and layoffs.

 

TIME Retail

Wal-Mart’s Problems Go Beyond Underpaid Workers

An employee pulls a forklift with display units for DVD movies at a Wal-Mart Stores Inc. location ahead of Black Friday in Los Angeles, Calif. on Nov. 24, 2014.
Bloomberg—Getty Images An employee pulls a forklift with display units for DVD movies at a Wal-Mart Stores Inc. location ahead of Black Friday in Los Angeles, Calif. on Nov. 24, 2014.

The retail giant's customers are less and less satisfied with its services

Wal-Mart’s announcement on Thursday that it would start paying its employees more and training them better, and would invest more heavily in online operations, almost seems like it could have been a reaction to a survey released a day before, ranking the company as “the most hated retailer in America,” as several news outlets have put it.

It wasn’t, of course. Wal-Mart’s plans had clearly been in the works for quite a while. But those plans, announced as the retail giant issued fairly weak quarterly results, address some of the biggest reasons for Wal-Mart’s ranking at the very bottom of the American Customer Satisfaction Index for 2014: poor service; messy or understocked shelves; and higher prices than many consumers expect.

The survey polled 8,700 consumers. It found overall satisfaction with retailers down by 1.4% over last year, mainly due to higher prices—a sudden reversal after three straight years of rising satisfaction. Wal-Mart’s score of 68 (on a scale of 100) was its worst since 2007, and continues a trend. In four of the past five years, it has scored the lowest of all department and discount stores. This year, it scored the lowest among all retailers. Just a decade or so ago, it regularly scored near the top.

On Thursday, Wal-Mart announced it would boost employee pay to a minimum of $9 an hour, which will put Wal-Mart’s lowest salaries 24% above than the $7.25 federal minimum wage. Some 500,000 workers, or about a third of Wal-Mart’s U.S. work force (including at the Sam’s Club warehouse-store chain) will be affected. It will, of course, eat into profits. Wal-Mart said the short-term hit would yield longer-term benefits down the road, as happier, better-trained, longer-tenured employees will translate into more customer traffic. The wage hikes and improved training will cost Wal-Mart about $1 billion this year.

The action will result in average hourly full-time wages at Wal-Mart rising to $13 an hour from below $12 an hour. That’s still below the $15 per hour demanded by pressure groups, some including Wal-Mart workers, that have been seeking pay hikes from big retailers and fast-food chains.

Wal-Mart also pledged to invest more in its e-commerce operations. The ACSI report noted that even as overall satisfaction with retailers fell by 1.7%, satisfaction with online retailers rose by 5.1%, to 82 out of 100.

That was due in part to a dip in satisfaction the previous year due to a spate of delivery problems, particularly during the holiday season. Still, it points to a big problem brick-and-mortar retailers — even those, like Wal-Mart, with substantial investments in e-commerce: the convenience of online shopping is tough to beat. There’s no such thing as a surly employee or a messy shelf. And what you’re looking for is generally in stock.

Hence Amazon’s place at the top of the list, with a score of 86. In the discount and department store category that Wal-Mart belongs to, Nordstrom was tops, also with an 86. Target tied with Kohl’s at No. 3, each scoring an 80.

 

TIME 2016 Election

Hillary’s 140-Character Campaign Strategy

Hillary Rodham Clinton
Carolyn Kaster—AP Former Secretary of State Hillary Clinton speaks at Georgetown University in Washington on Dec. 3, 2014.

She's pioneered a new way to use Twitter

Hillary Clinton isn’t officially running for president and she isn’t exactly campaigning yet either.

Since last year’s book tour, her public appearances have been limited to speeches, both paid and unpaid, and even campaign events where she isn’t appearing are tightly controlled. That creates a supply-and-demand problem, though, when news breaks and the public wants to know where she stands on an issue.

Enter Twitter. Though Clinton didn’t join the social media platform until mid 2013, she’s pioneered a new way of using it to flesh out her campaign platform 140 characters at a time.

It’s a great political strategy for her, though it leaves a bit to be desired among the public and the press. Clinton’s tweets come late in the news cycle, allowing her to score a quick point off Republican in-fighting after much of the debate has played out.

They’re also tightly scripted, which means there’s no problem of going off-message or losing control of the story, like she did during what should have been a softball interview with NPR that touched on her changing views on gay marriage.

The 140-character limit on Twitter also means that Clinton’s pronouncements aren’t as substantive as they often seem at first. Without reporters asking follow-up questions, Clinton can make a rather general statement about, say, being in favor of vaccination, without explaining her past doubts.

Or she can criticize an attempt to roll back the Dodd-Frank bank reforms without specifying exactly which changes to the law she would support or oppose.

Judge for yourself. Below are some of the major policy positions Clinton has taken on Twitter.

Against the Supreme Court’s decision in the Hobby Lobby case:

In favor of raising the minimum wage:

In favor of childcare legislation:

In favor of President Obama’s immigration actions:

Against rolling back part of Dodd-Frank:

In favor of some of Obama’s economic ideas in the State of the Union:

In favor of vaccination:

TIME Economy

Minimum-Wage Increases Go Into Effect Across the Country

The wage hikes in several states and D.C. are expected to affect 3.1 million people

Roughly 3.1 million workers across the United States woke up to a little New Year’s Day present on Thursday, January 1, when increases in the minimum wage took effect in 20 states and the District of Columbia.

The recent bumps brought the total number of states with a minimum wage above the federal wage floor to 29, the New York Times reports. The federal minimum wage is $7.25 an hour.

Some of the increases are relatively tiny—a few cents—while some, of a dollar or more, could have a more significant impact on the economy. Minimum wage hikes in more states are set to take effect later in the year, according to the NYT.

The minimum wage hike is expected to impact 3.1 million of the 3.3 million Americans who earn the minimum wage.

[NYT]

TIME 2016 Election

The 9 Times Hillary Clinton Has Taken a Stand Since 2013

USA - Hillary Clinton speaks at Iowa Senator Tom Harken'a annual Steak Fry
Brooks Kraft—Corbis for TIME Hillary Clinton Hillary Clinton gazes pensively into the distance at Iowa Senator Tom Harken'a annual Steak Fry in Indianola, Iowa on September 14, 2014.

Like other presidential candidates, Hillary Clinton had an opinion on just about everything in 2008. How to reform the U.S. health care system? Check. What to do about climate change? Check. Even minor issues like how to lower the price of gas required her to come up with a plan.

But when she became Secretary of State, Clinton followed tradition and kept her opinions to herself, especially on domestic policy. And since leaving Foggy Bottom in 2013, she’s mostly avoided specifics.

She says she’s in favor of protecting the environment, for example, but has yet to stake out her position on fracking or the Keystone XL pipeline. She says she’s against eliminating net neutrality, but has yet to say what, exactly, the government ought to do to protect it. And while she’s talked a big game about U.S. military engagement abroad, it’s unclear how her positions on, say, Ukraine or Iraq would differ from those of President Obama.

That ambiguity is understandable. She doesn’t hold public office. She’s not officially on the ballot. And committing to a position publicly limits her future options, politically. But given how many times she hasn’t taken a position on the issue of the day, it’s worth noting the handful of times she has.

Here’s a look at the nine most substantive policy positions Clinton has staked out since stepping down as Secretary of State.

1) The U.S. needs serious immigration reform. When President Obama announced his controversial executive order in November shielding up to five million undocumented immigrants, Clinton tweeted her approval within minutes, and then followed up with a statement calling for immediate, bipartisan and comprehensive immigration that would “focus finite resources on deporting felons rather than families.”

2) The U.S. should have armed the rebels in Syria. In an interview with the Atlantic’s Jeffrey Goldberg in August, Clinton blamed the rise of the so-called Islamic State, or ISIS, on the U.S. not doing enough to support moderate rebels when the Syrian civil war first broke out. “The failure to help build up a credible fighting force of the people who were the originators of the protests against Assad — there were Islamists, there were secularists, there was everything in the middle — the failure to do that left a big vacuum, which the jihadists have now filled,” she said. That said, Clinton’s ideas on how to rout ISIS now appear to be more or less the same as Obama’s.

3) Gay people should be allowed to marry. In March 2013, Clinton formally announced in her support for gay marriage, marking a major reversal of the position she’d held for decades. Her rivals criticized her for jumping on the bandwagon only after the issue of gay marriage had become widely acceptable, but she defended herself as a “thinking human” who is allowed to “evolve” on issues.

4) Americans shouldn’t torture people. At a human rights awards dinner in December, Clinton made her first public comments about torture since the Senate released its controversial report on the issue earlier this month. She said unequivocally that she is against illegal renditions and brutal interrogation methods. “The U.S. should never condone or practice torture anywhere in the world,” she said.

5) The federal government should raise the minimum wage. In a speech at a campaign event for Massachusetts gubernatorial candidate Martha Coakley in October, Clinton told the crowd not to “let anyone tell you that raising the minimum wage will kill jobs – they always say that.” She then went on to defend raising the federal minimum wage. As a senator, Clinton repeatedly proposed legislation that would automatically increase the federal minimum wage anytime members of Congress saw their own pay increase.

6) Negotiating with Iran is a good idea, so long as the U.S. gets a good deal. Much to the chagrin of many in the pro-Israel crowd, Clinton has not only expressed support for the administration’s negotiations with Tehran over its nuclear program, she has taken credit for initiating the secret talks back in 2012. In the past year, she has lightly tempered that unequivocal support by cautioning that the U.S. should be careful about what it concedes to, repeating that “no deal is better than a bad deal.”

7) The U.S. shouldn’t trust Putin. At a speaking event this year, Clinton called the Russian President an arrogant bully. As Secretary of State, she said she was in favor of the Obama administration’s “reset” policy with Russia, but her opinion of the policy appears to have cooled. “I think that what may have happened, is that both the United States and Europe were really hoping for the best from Putin as a returned president,” she told CNN’s Fareed Zakaria in an interview in July. “And I think we’ve been quickly, unfortunately, disabused of those hopes.” While those seem like fightin’ words, policy analysts point out that it’s less clear how Clinton’s distrust of Putin would translate to a change in actual U.S. policy—much less potential military engagement—in Ukraine.

8) All American kids should get free, high-quality pre-K. Anyone remotely familiar with Clinton’s resume won’t find this to be much of a shocker, but early-childhood education is one of the issues she’s been most outspoken about in the last two years. She’s advocated for everything from universal pre-K and free nurse home-visits for at-risk mothers, to expanding existing programs, like Head Start and paid family leave.

9) #Blacklivesmatter. Clinton took a shellacking this fall for failing to say much one way or an another on the protests in Ferguson, Missouri, and about the Eric Garner case in New York. At an awards ceremony in December, she broke her silence—kinda. “Yes, black lives matter,” she said, but then failed to elaborate. She has yet to say whether she’s in favor of broad sentencing reform, body cameras on police, or how she might limit what military equipment is available to police forces.

TIME Retail

Minimum Wage Hikes to Affect More Than 1,400 Walmart Stores

Operations Inside A Wal-Mart Stores Inc. Location Ahead Of Black Friday
Patrick T. Fallon—Bloomberg / Getty Images An employee pulls a forklift with display units for DVD movies at a Wal-Mart Stores Inc. location ahead of Black Friday in Los Angeles, Calif., on Monday, November 24, 2014.

An internal memo details how compensation will be compressed at the top and bottom of the pay scale

An internal Walmart memo circulated to store managers earlier this month shows the retailer estimates that minimum wage hikes in 21 states will affect worker base salaries at 1,434 stores across the United States, according to a new report Wednesday.

The memo obtained by Reuters outlines which positions will be impacted by the hikes when they take effect on Jan. 1. Base salaries for three lower-level positions — cashiers, cart pushers and maintenance workers — will be lumped together under one rate, while the minimum premium pay to workers in supervisor roles like deli associates will narrow to within a closer range of lower grade workers.

Walmart, the country’s biggest private employer with some 1.3 million workers, has struggled to boost sales after Americans lost jobs or already low incomes during the financial crisis. The company estimates that its average full-time hourly wage is $12.92, but its chief executive has indicated Walmart plans to improve opportunities so more of its workers making the federal minimum wage of $7.25 an hour can earn more.

Read more at Reuters

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