Walgreens increases starting wage for hourly workers to $15

LOS ANGELES - Walgreens announced on Tuesday that it is increasing the starting wage for all of its hourly team members to $15.

The company said that new wages will begin taking effect in phases beginning in October this year and are expected to be fully implemented by Nov. 1, 2022.

Roz Brewer, CEO of Walgreens Boots Alliance, said the move will impact workers at more than 9,000 Walgreens locations.

"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, and to continuing to serve our critical role in community health care," Brewer said.

The company says the cost to increase wages for all hourly workers is expected to add up to $450 million over the next three years.

Competing pharmacy chain CVS increased its minimum hourly wage to $15 earlier this month.

CVS said that about 65% of its hourly workers already make more than $15/hour.

Other companies are also hiking wages as applicants become more discerning. McDonald’s announced in May that entry-level workers will get at least $11 to $17 an hour, and the starting range for shift managers will be at least $15 to $20 an hour, based on the restaurant’s location.

Currently, the federal minimum wage is $7.25 and has not been raised since 2009. Despite many companies raising their wages, millions of Americans are still earning less than $15 an hour. The nonpartisan Congressional Budget Office calculates that even by 2025, roughly 17 million workers will remain below that level.

The $7.25-an-hour federal minimum wage has now gone the longest stretch without an increase since it was first introduced in July 2009. Labor Department data showed that last year, only about 250,000 people — fewer than 0.5% of all workers — earned that wage.

In July, the Associated Press reported that businesses, particularly in the restaurant, retail and travel industries, have been offering a $15 wage to try to fill enough jobs to meet surging demand from consumers, millions of whom are now spending freely after a year in lockdown. And many of the unemployed, buoyed by stimulus checks and expanded jobless aid, feel able to hold out for higher pay.

The change since the pandemic has been swift. For years, and notably in the 2020 presidential race, labor advocates had trumpeted $15 an hour as a wage that would finally allow low-paid workers to afford basic necessities and narrow inequality. It struck many as a long-term goal.

Yet other trends have also helped drive the movement toward a $15 wage. The Fight for $15 labor movement has organized strikes by fast food workers and has lobbied states and cities for higher minimum wages. Thirty states and the District of Columbia have adopted wage floors that exceed the $7.25 federal minimum. Eleven states have passed laws that will lift their minimum wages to $15 over time. Among them is Florida, where voters last year approved a measure raising the minimum to $15 by 2026.

Other states on track to a $15 an hour wage floor include California, Illinois, New York and Virginia. Ben Zipperer, an economist at the liberal Economic Policy Institute, estimates that four in 10 workers live in states where the minimum is set to reach $15 in the coming years.

The National Employment Law Project, an advocacy group for low-income workers, calculates that 26 million people, or about 16% of workers, have received higher pay because of all the state and local minimum wage increases since 2012, though often to less than $15 an hour.

The increases have disproportionately benefited Black and Hispanic workers, the report found. Historically, higher minimum wages have been found to reduce racial wage gaps.

This story was reported from Los Angeles. The Associated Press contributed.