8 Companies Raising the Minimum Wage

A minimum wage is the lowest amount of money that workers can be paid for their service, according to state or federal law. The federal minimum wage is $7.25 per hour for employees covered under the Fair Labor Standards Act who are non-exempt.

But many states have increased their minimum wage beyond the federal level in an attempt to provide workers with a living wage. For example, the minimum wage in the following regions in 2024 is:

• $16.00 per hour in California
• $16.28 per hour in Washington (higher in certain localities)
• $17.05 per hour in the District of Columbia, increasing to $17.50 on July 1, 2024

As other states increase their minimum wage rates, a number of companies have benefited their workers by raising their own entry-level wages beyond the levels set by the federal or state governments.

Here are eight companies that have raised their minimum wage for their employees.

1. McDonald's

In 2021, McDonald's (MCD) increased its wage range for entry-level employees to $11 to $17 per hour. It also increased the range for shift managers at certain restaurant locations to $15 to $20 per hour.

The fast-food giant sought to attract customers six years earlier by improving 10% of its workers' wages on the premise that happier workers make happier customers. It raised wages to $9.90 per hour in July 2015.

The company later noted that employee turnover rates dropped and customer survey scores increased. Still, labor advocates were displeased and pressed the hamburger chain to raise its minimum wage to a rate of $15.

According to data gathered by third-party staffing agency, Zippia, in 2023, the average hourly pay at McDonald's was $12.10 per hour. An assistant manager made on average $18.81 per hour. A cashier at the national chain averaged $13.53 per hour.

McDonald's planned to raise its average hourly pay to $15 in 2024.

2. Starbucks

For 2024, Starbucks is raising the wage it pays most hourly workers by a minimum 3%. For those employees who have worked from two to five years with the company, wages will rise a minimum of 4%. And those with more than five years of employment will receive a raise of at least 5%.

In 2022, it raised the hourly minimum for all U.S. retail employees to $15.

In July 2016, this renowned coffee store announced that its 150,000 entry-level workers would receive a long-expected minimum wage increase of up to 15%. The fact was that at least 8.5% of its workers already demanded this higher pay.

One day after this announcement, Starbucks (SBUX) also raised its prices. A Starbucks spokeswoman mentioned that wage increases and beverage price increases were two separate decisions. Both were intended to make the company more competitive.

In 2024, Starbucks pays an average hourly salary of $17.50. Its minimum hourly range for a barista is $15 to $24. According to Zippia, Team Leaders earned $33.61 per hour in 2023.

3. Bank of America

Bank of America (BAC) has bumped up its minimum wage several times since 2019:

• $17 in 2019
• $20 in 2020
• $21 in 2021
• $22 in 2022
• $23 in 2023, with plans to raise it to $25 by 2025.

Bank of America now pays a higher minimum wage than most of its competitors. The average hourly rate was $25.58 in 2023.

4. Wells Fargo

Wells Fargo (WFC) raised its U.S. minimum hourly wage by 32% as of March 2018, to $15 per hour.

In 2020, it again took steps to improve wages when it raised the range of its minimum wage to $15 to $20 per hour (the exact rate depended on where an employee was located). The change would impact more than 20,000 employees.

The financial services giant's average hourly wage was $20 in 2023, a figure that represents an annual salary of $41,599.

5. Aetna

In 2015, health insurance company Aetna raised the wages of its lowest-paid employees from $12 per hour to almost $16, an increase of 33% more per hour. At the time, approximately 5,700 of its U.S. workers earned that $12 an hour rate.

The announcement stimulated significant public interest, with some commenting that Aetna showed that a well-paid workforce makes for a happier, more productive business with long-range benefits.

As of 2023, the healthcare company paid an average of $29.73 per hour. The highest salaries were paid to lead technicians ($58.58 per hour), data engineers ($56.79), and team leaders ($55.69).

6. Walmart

People have been in love with Walmart's (WMT) low prices for years. But there's been a lot of criticism of the corporate giant's alleged stinginess, especially when it comes to how much it pays the workers in its stores.

To improve its reputation, the company hiked the pay for entry-level workers to at least $10 an hour in January 2016. The company projected that this increase would affect more than 1.1 million employees.

In January 2023, Walmart made another move to improve the pay of its workers. Its chief executive officer (CEO) announced an average hourly wage hike to $17.50 for its associates. The new rate took effect in March of that year.

According to Zippia, in 2023, the average hourly wage at Walmart was $15.20 per hour.

7. IKEA

Ikea may be known for its ready-to-assemble affordable furniture and housewares, but the company also tries to stay ahead of the trend by paying its workers a living wage.

In 2015, the company announced that it would raise its minimum wage in the U.S. to about $12 per hour, effective in January 2016. This amount represented a 10.3% increase over the previous year.

In response to its initiative, other retail store companies, including Target and Walmart, tooks steps to do the same.

Then in 2021, the company announced another U.S. rate hike to take effect in January 2022. Most entry-level workers would receive $16 while others would start at $17 to $18, depending on their locations. The company's action would result in an average hourly wage of $20.

Ikea's average hourly rate was $28.64 (depending on store location), as of 2023.

8. Costco

Costco (COST) joined the momentum and has increased its minimum hourly rate several times since 2016.

It hiked its starting wage of $11.50 an hour to $13 in March 2016, and threw in company-sponsored health benefits to boot. Then in 2018, it raised it to $14.

Again, in March 2019, Costco raised its minimum hourly wage to $15.

Then, in an effort to keep its workers happy, the warehouse boosted its average starting hourly rate from $16 to $17 in October 2021 (the second increase that year).

In 2023, Costco's average hourly rate was $17.80.

The Bottom Line

The minimum wage is the lowest amount of money that any employer can pay their workers, by federal or state law. This amount may vary based on what you do and where you live.

Some companies take matters into their own hands by paying workers above and beyond what is legally required by the federal government.

Our list above isn't an exhaustive one. Other major U.S. companies that are raising their minimum wages include Target, T.J. Maxx, Amazon, and Gap.

With their higher minimum wage rates, all reported improved customer service, happier workers, savings, and more professional candidates seeking to work for them.