Walgreens is the latest retail giant to raise its minimum wage for workers,increasing its starting wage to $15 an hour. Walgreens Boots Alliance Inc. joins several retailers in trying to retain and lure more workers with larger wages. Prior to Walgreens’ announcement, chief competitor CVS Health announced it would raise its minimum hourly starting wage to $15 in July of 2022.
The pandemic has caused a national labor shortage requiring retailers to exert more efforts to keep current employees and attract new ones. The obvious solution has been to increase wages now to avoid any problems later during the holiday shopping season. Many businesses are deeply concerned that there will be a shortage of workers available to work in their warehouses and retail stores during the holidays.
Walgreens announced that its wage increase will occur in phases and begin in October with full implementation expected in November. It plans on investing $450 million over the next three years to support the wage increase. One-third of the amount will be invested in fiscal 2022. “Investing in and rewarding our team members is not only the right thing to do, it’s highly important to retaining and attracting a talented workforce,” Chief Executive Officer Roz Brewer said in a statement.
According to a company spokesperson, the starting wage at Walgreens for workers currently is no less than $10 per hour, with about half of Walgreens’ total 190,000 workers earning at least $15 an hour at its 9,100 locations. Once the planned program of COVID-19 booster shots is implemented, Walgreens and other pharmacy retailers that plan to offer booster COVID-19 vaccines will need additional workers to handle the influx of customers expected between November and January.
Some industry analysts have warned that the increase in wages could cause a rise in prices for that company’s products. One month after announcing its company wage increase, Chipotle said that it had raised menu prices by about 4 percent to make up for the increase in wages. However, the company said that it had no further plans to increase prices more in the future.