Target announced two years ago that it would raise the companywide minimum wage to $15 per hour by the end of 2020, winning plaudits from progressives and advocates for an increased minimum wage.
Now, with just one year before Target is scheduled to hit the magic $15 mark ($13 is the current minimum wage), it turns out that raising the minimum wage has impacted many Target employees in the exact way that opponents of mandatory minimum wage increases predict.
CNN Business spoke to numerous current and former Target employees who revealed their hours at the retail giant have been cut since Target announced its push to increase the store’s minimum wage, which for many employees means they lose their health insurance benefits. Target offers health benefits to employees who work more than 30 hours per week.
One employee, Heather, told CNN that when her hourly pay rate increased, management cut her total work hours.
“I got that dollar raise but I’m getting $200 less in my paycheck,” she said. “I have no idea how I’m going to pay rent or buy food.”
Other employees, Caren and Michael, told CNN their hours were cut substantially. Caren said she lost her health insurance — forcing her to quit her job — while Michael has had to pick up a side job just to make ends meet.
One of the reason hours are being cut is the development of retail automation, namely in the form of the self-checkout line.
“They really cut those hours back from them with the introduction of self-checkout,” a former store director told CNN.
Another reason hours are being cut is because Target is hiring more people, which means that employees overall work fewer hours. This translates to potential payroll savings for corporate, in addition to benefit savings since so many employees do not meet the work-hour threshold required to earn benefits.
“The company keeps hiring more and more people part time. They fluctuate a lot. It’s not fair,” Target employee Lee Beecher told CNN.
Another employee from Virginia told CNN her hours have been slashed in half.
“It’s frustrating because they hired four more people. We’re begging for hours,” the employee said.
For its part, Target denies it is cutting hours to pay for the increased minimum wage. The company told CNN the mix of part-time and full-time workers has remained steady over the past several years.
As the push to increase the minimum wage floods the retail industry, statistics from the Bureau of Labor Statistics show that the average work week for retail employees dropped from 30 hours in August 2018 to 28.5 hours in August 2019, which translates to more than 800,000 “involuntary part-time workers.”