IKEA to Pay More Than Living Wage

The government plans to introduce an increased employment allowance to soften the impact of the New Living Wage on employers, but the ACS said this would provide comparatively “small compensation” for convenience stores.

The retailer has committed to paying all staff at least £7.85 an hour, and a minimum of £9.15 an hour in London.

As part of a holistic transformation of basic co-worker conditions, IKEA will pay the Living Wage as defined by the Living Wage Foundation.

In his first post-election budget, British finance minister George Osborne announced a compulsory living wage for workers aged over 25, starting at 7.20 pounds ($11.24) an hour when it is introduced next April and rising to 9.35 pounds by 2020.

The Swedish chain already announced it would raise its minimum wage in the USA for its shop floor employees to $10.76.

The company said the move would affect 50pc of its 9,000 workers in the UK.

The decision by the chancellor to hike the minimum wage to a living wage has been received with mixed reactions.

“This opens up some fruitful conversations with others who have said this is impossible in retail and it can’t be done”.

The introduction of the Living Wage is part of a wider transformation IKEA is making to basic co-worker conditions as it looks to ensure that co-workers not only have the right level of pay but also a schedule that works for both them, as well as the business and customers, and the right contract.

Director of the Living Wage Foundation, Rhys Moore, said in a statement that he questions if it was even really a living wage.

“It is time for some of the big household name retailers to show a lead on this issue too”, he added.