Strong demand for labor does little for wages, except in retail

In a further sign that Minnesota's economy continues to improve, the state's employers added 11,800 jobs to payrolls in February.

The employment news in Minnesota's February jobs report was largely good. Besides the additional jobs, it noted that the employment loss reported in January shrank by almost 40 percent to about 5,000.

Even though Minnesota's unemployment rate last month held steady at 3.7 percent, more people reported being paid for work and more started a job hunt.

The strong demand for labor, and supply hampered by a tsunami of retirements from members of the Baby Boom generation, might lead some to conclude that wages would rise. But most were flat.

The exception was in the retail industry, where the demand for workers is increasing, state labor economist Steve Hine said.

Hine said the typical decline in retail employment after the holiday season did not occur this year.

"That suggests to me that retailers are retaining a larger share of their employment than they have in the past," he said. "They're not scaling back to the same extent that they had over at least the five prior years."

Retail payrolls in Minnesota have grown slightly faster than total employment, but wages in the sector have grown far faster than average.

Minnesota retail jobs paid an average of $14.73 an hour last month — 9 percent more than a year prior.

Nationally, retail wages were up 2.8 percent compared to just 2 percent for the private sector as a whole.

Last month, Walmart promised to boost pay to at least $9 an hour by April and $10 by early next year. The parent company of TJ Maxx and Marshalls followed suit.

But Target wouldn't budge. Company executives have said setting a single nationwide wage floor isn't reasonable. They say Target adjusts compensation to stay competitive in the wide variety of labor markets where the company operates.

But The Wall Street Journal reports Target will now raise its companywide minimum hourly wage to $9 — something spokeswoman Molly Snyder would neither deny nor confirm.

"At Target, our goal is always to make sure that we're recruiting and retaining the absolute best talent that there is in any given marketplace," Snyder said. "We don't typically disclose an average or starting wage because it really is such a market-specific number."

It's not clear how many Target workers make less than $9 an hour. However, company officials have said Target pays above the local minimum wage everywhere it operates. The website payscale.com lists the bottom of the pay range for Target sales associates at $7.73 — 48 cents above the federal minimum and 16 cents above Walmart.

"We have Walmart to thank for raising the bar and putting everyone else on notice," retail consultant Carol Spieckerman said.

Spieckerman said Target's apparent decision to boost pay is a direct result of the announcement from its larger competitor.

"Sometimes Walmart follows Target. Sometimes Target follows Walmart," she said. "This is clearly a case where Target is falling in line with a standard that Walmart set."

Labor advocates are praising the decision. Bree Halverson — Minnesota state director for Working America — said she expects Target will continue to raise wages.

"Walmart did $10 an hour, and we know that it takes more than $9 an hour to live on," Halverson said. "But we need to start somewhere. And hopefully wages will keep going up for workers who deserve fair wages because they're what helps Target be a successful corporation."

Target's move to raise wages may have a bigger impact outside the company's home state.

Under a measure Minnesota lawmakers passed last year, the state's minimum wage for most employers is already set to rise to $9 an hour Aug. 1 and $9.50 an hour a year later. By 2018 it will be indexed to inflation.