IKEA Workers Receive 17% Minimum Wage Increase

IKEA’s new minimum wage rate tied to cost of living, will vary depending on location.

Half of IKEA’s retail workforce will receive a pay boost, the Swedish-based company announced.

Beginning January 1, 2015, the minimum wage rate for IKEA retail store employees will average $10.76, which represent a 17 percent increase of the current federal minimum wage of $7.25 per hour. However, many states and cities in the U.S. have passed minimum wage rates that may exceed IKEA’s cost-of-living approach to wage increases. The retailer will still be required to adhere to state and federal minimum wage rates that exceed the company’s minimum wage.

Employees making minimum wage will be eligible for new pay rate determined using the MIT Living Wage Calculator. Workers’ wages will vary depending on the cost of living in specific locations, as the calculator determines the cost of living in specific locations based on the costs of food, housing, transportation, and medical care.

The calculation does not include the cost of self-assembled furniture.

What’s the difference between minimum wage and living wage? Learn more here.

IKEA is the world’s largest furniture retailer with 13,000 U.S. employees in 38 retail stores, five distribution centers, two service centers, and one manufacturing plant. Earlier in 2014, fashion retailer Gap announced it was raising its minimum wage for workers in the U.S. to $9.00 per hour in 2014 and to $10.00 per hour in 2015.

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