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The popular store, IKEA, is making headlines for its new policies. IKEA’s U.S. division is raising the minimum wage for thousands of its hourly retail workers. They will no longer base minimum wage on the competition, but instead, in accordance with the cost of living in each city.
Rob Olson, IKEA's acting U.S. president, says the latest move is in accordance with the company's vision of "creating a better life" for its employees.
"Now, we decided to focus less on the competition and more about the co-workers," he explained to The Associated Press.
The increases will be based on the MIT Living Wage Calculator that takes into consideration the everyday costs of food, transportation, housing, etc., according to The Wall Street Journal.
The average increase to minimum wages will be an estimated 17 percent. The new rates will be effective January 1, 2015. IKEA is also looking at standard benefits for workers.
New jobs for retail workers are common. Olson believes that the increase in wages will reduce the worker turnover. Almost 20 percent of full-time retail workers will leave their jobs annually, according to the National Retail Federation.
There are 38 existing IKEA locations in the United States. Three new stores are set to open before the end of 2015.