This week, business news can be summarized in a series of numbers: 11, 15, 19, 78, 140, and 280. Here’s what those numbers mean…
11 and 15. Those are the minimum hourly dollar wage rates Target plans on paying workers starting next month ($11) and by 2020 ($15). It’s a big deal to raise the retailer’s minimum wage immediately for hundreds of thousands of workers, including temporary holiday workers. And it’s a big deal to commit to reaching a target of $15/hour in a little more than two years. Target did both in an announcement on Monday. You can learn about this decision here: https://www.cnbc.com/2017/09/25/target-to-raise-its-hourly-minimum-wage.html. So why is Target doing so? I think there are a couple of reasons that matter more than others. First, it’s a competitive response to Target’s big box store nemesis, WalMart, which had recently announced an increase in its own minimum wage to $10/hour. Targets and WalMarts are often located nearby each other and draw from the same younger, entry- or re-entry-level workers. Second, Target’s wage hike is a response to broader tightening in the same labor market –nine years after the start of the Great Recession in 2008 and eight years since the beginning of the Great Stock Market Recovery. But better late than never for these retailer foot soldiers. Incidentally, Target also reiterated their guidance about annual earnings and revenues. This means that Target had already planned for these wage increases, perhaps months ago. Target’s move matters for Minneapolis, where a city ordinance mandated a $15/hour minimum wage for city-based businesses by 2022. Perhaps Target’s move will also make it easier for other Minnesota cities like St. Paul to pass their own minimum wage ordinances. And Target’s move is consonant with a broader national campaign among labor unions to get a $15/hour federal minimum wage.
19. That’s the annual revenue in billions of dollars of the Wisconsin-based retailer, Kohls, which announced on Tuesday that their CEO, Kevin Mansell, was stepping down amid faltering performance. Here is where you can learn more about this recent move: http://fortune.com/2017/09/26/kohls-new-ceo-michelle-gass/. Mansell was a Kohls lifer, having started at the company in 1982 when the retailer was regional. Now it’s a national chain of 1150 stores generating $19 billion in revenues annually. But it’s been tough for Mansell to surpass $19 billion. Kohls faces some of the same challenges Target faces –for example, getting shoppers to stores rather than to Amazon via the Internet. Target is responding with a make-over of stores, addition of groceries, extrication from Canada, development of Target.com. Kohls can’t easily replicate that, especially the grocery play. Mansell’s successor may try something else –team up with Amazon to let Amazon customers pick up and return products at Kohls stores. If Kohls goes forward with this strategy, then it will be on the watch of the new CEO, Michelle Gass, who came to Kohls from Starbucks where she gained fame as an adroit marketeer. Let’s see if Gass can surpass $19 billion with or without Amazon.
78. That’s the jersey number of Pittsburgh Steeler tackle, Alejandro Villanueva. He’s the hulk of a man who stood alone in the entry tunnel with hand over heart at last Sunday’s Steeler’s game while the National Anthem was sung. On a day when his teammates waited inside the tunnel in protest against President Trump, Villanueva stood out favorably for many viewers. Here is where you can learn more about Villanueva’s gesture: http://money.cnn.com/2017/09/25/news/companies/alejandro-villanueva-jersey-sales-steelers/index.html?iid=surge-stack-dom. The decorated former US Army Ranger with multiple tours in Afghanistan now has one of the most popular jerseys for purchase. This week it is outselling It is outselling jerseys for Marshawn Lynch and Aaron Rodgers at the NFL shop. He’s an unlikely hero for both Tump proponents and opponents on the issue of NFL players taking a knee during the National Anthem. Oh, the original knee-taker, Colin Kaepernick also had a best-selling jersey after he began his silent protest. Commerce apparently loves controversy, at least in the NFL.
140 and 280. Those are current (140) and potentially new (280) character limits Twitter. The social media business has grown by leaps and bounds since it launched in 2006, yet there’s one constant that defines it to this day: that 140-character limit for tweets. The company on Tuesday announced it would let a small, random sampling of users tweet updates up to 280 characters long moving forward — double the previous amount. Apparently, the limit is frustrating certain users…in the US but not Japan. Here’s where you can learn more about this development at Twitter: https://finance.yahoo.com/news/twitter-tests-new-280-character-limit-users-210006742.html. According to Twitter’s own data, about 9% of US users hit the 140-character limit, but only 0.4% of Japanese users hit the same limit. So Twitter is experimenting with a doubled character limit largely for the Americans. Now, long-windedness has never been a problem with this American. And anyone who thinks otherwise about me is just wrong –very, very, very, very, very, very, very, very wrong.
On Friday, I’m heading to Austria and the Vienna University of Economics and Business). I’ll be there all of next week as a visiting lecturer. Next week, you’re in for a treat as my Carlson faculty colleague, Aaron Sojourner joins Dave to analyze current business news. Here is where you can learn more about Aaron’s research, teaching and community outreach work: https://carlsonschool.umn.edu/faculty/aaron-sojourner. Break a leg, Aaron!
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