CVS Health will raise its minimum wage to $15 an hour by July 2022, the company said Wednesday, as it competes for employees in an increasingly tight labor market.
The company joins other Fortune 500 businesses such as Chipotle, Walmart, and Costco that have recently committed to raising their minimum wages to compete for employees.
In its second quarter earnings report filed with the SEC Wednesday, CVS said it would raise salaries for store, warehouse, and call center employees. On the earnings call Wednesday it said the wage investment is needed because the company has experienced pressure in the labor market.
The company will invest $600 million in wages over three years and will allocate $125 million alone from September to December 2021.
As the pandemic battered retail in March and April 2020, Americans experienced massive layoffs not seen since World War II. Now that the economy is slowly opening back up, employers are on the search for workers. Companies have found it’s been much harder to hire new employees than it was to lay them off.
Earnings for U.S. companies are starting to stabilize and many businesses are trying to return to a sense of normalcy as the effects of COVID-19 on the U.S. economy recede.
If CVS wants to continue to grow in the future, it will need to bring in more employees, Lynch said, and a wage increase will help it be more competitive in a tight retail labor market.
“Increasing our minimum wage for hourly employees will help attract and retain the talent needed for our customer-centric business approach,” Lynch said Wednesday. “Just as critical, it aligns with our values and our purpose and builds on the history of our investment in our people.”
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