LITTLE ROCK — While retail chains have reduced their payrolls in recent years, Hobby Lobby is expanding its payroll by continuing to raise its minimum starting hourly wage.
The Oklahoma-based arts-and-crafts chain is increasing its hourly minimum wage for the third consecutive year. Full-time employees will get at least $12 per hour and part-time workers, $8.50.
“Hobby Lobby has been able to grow steadily during a national recession, and we want to thank our employees for their hard work and allow them to share in the company’s success,” David Green, chief executive officer and founder of Hobby Lobby, said in a release Thursday. “Our employees are essential to the continued growth of Hobby Lobby, and we’re excited to acknowledge their contributions.”
In 2009, Hobby Lobby raised its minimum hourly wage for full-time workers to $10. Last year, it raised it to $11 for full-timers and $8 for part-timers, up from $7.25, which is still the federally mandated minimum.
The increase in wages benefits existing employees, said Chad Previch, company spokesman. For example, those making $11.75-$13.75 will receive a 25-cents-per-hour increase,and those paid between $13.76 and $13.99 will now get $14 an hour, he explained.
The chain has 229 hourly employees in Arkansas at 10 stores - in Fayetteville, Springdale, Fort Smith, Rogers, Russellville, Conway, Jonesboro, North Little Rock, Hot Springs and Little Rock. It has 470 stores in 39 states.
Hobby Lobby is using what economist Michael Pakko said is known as the efficiency-wage hypothesis, which holds that paying a higher wage will encourage higher output and raise worker morale, while discouraging absenteeism and theft by employees and customers.
“The notion to look out for employees by raisingwages comes from Henry Ford, who paid his workers more to help with retention and inspire production,” said Pakko, who is chief economist at the University of Arkansas at Little Rock’s Institute for Economic Advancement.
Robert Harms, general manager of the Little Rock store, said raises make employees feel appreciated. The Hobby Lobby store in Little Rock has 55 employees, 76 percent of whom are fulltime.
Turnover at the Little Rock store has been very low in the past few years and sales have increased every year, he said.
The company also offers benefits to full-time workers, including health insurance, for which the chain helps with the costs, plus paid vacations and paid sick leave, Harms said.
Keeping product linesfresh has helped the company attract customers looking to save money, he added.
“People don’t have a lot of money to go buy a new home, so they’re looking for ways to improve what they have,” he said.
Business, Pages 29 on 04/15/2011