Apple boosts wage budget for workers amid tight labor market

Apple Inc. On increasing workers’ salaries amid rising inflation, a tight labor market and hourly union pay-outs among store employees.

The iPhone maker on Wednesday told employees in an email that the company is increasing its overall compensation budget. Starting wages for US hourly workers will rise to $22 an hour, or higher depending on the market, a 45% increase from 2018. Starting salaries in the US are also expected to increase.

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“Supporting and retaining the best team members in the world allows us to provide the best and most innovative products and services to our customers,” an Apple spokesperson said in a statement. “This year as part of our annual performance review process, we are increasing our overall compensation budget.”

Apple’s plans are only the latest from companies struggling to retain talent. Microsoft told workers this month that the company would nearly double its global budget for a merit-based salary increase.

In recent months, Apple has faced extraordinary labor unrest. This discontent has extended from retail workers in front-line stores to union agitation to salaried engineers unhappy with the company’s plans to return to their jobs.

Some workers, including those hourly employees at its stores and AppleCare, have been told that their annual assessments will be raised for three months and that their pay increases will take effect in early July, according to a memo reviewed by The Wall Street Journal. The regular review process coincides with the end of Apple’s fiscal year in the fall.

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These workers were told that the increase in the company’s compensation budget would be in addition to the increases in wages and special bonuses already received over the past year.

Facing a war for talent, tech companies have also seen their biggest compensation tool – stock awards – hampered by a decline in company valuations. Apple shares are down 21% this year to Wednesday’s close.

Apple CEO, Tim Cook (Getty Images/Getty Images)

This decline has propelled Apple from its position as the world’s most traded company by value.

The tech giant has experienced amazing growth in the past two years. Sales of iPhones, laptops and tablets to workers and students quarantined at home during the pandemic have helped boost Apple’s record earnings.

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The company was taking steps to improve its compensation plan, including special cash bonuses and money for household equipment.

The Labor Department said last month that US companies and government employers spent 4.5% more on labor costs in the first three months of the year, the fastest rise since 2001 and outpacing fourth-quarter annual growth of 4.0%. However, those dollars don’t go away when you consider inflation. Adjusted for inflation, private sector wages and salaries declined during this period.

Last week, Apple paused plans to call paid workers to the office for at least three days a week as Covid-19 cases soared in California. The company was one of the first to send workers home in early 2020 as the pandemic spread across the world and was a prime example of the challenges of getting workers back into the office with the outbreak of coronavirus variables and while some workers are pushing for it. More flexibility to continue working remotely.

The pandemic era has also seen a renewed push by workers to join unions at companies with a bold face, including Amazon.com Inc. and Starbucks Corp. And retail workers at various Apple stores in the United States, including in New York City, are trying to mobilize their companies with effort.

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Last year, Apple averaged $68,254 in compensation, according to a regulatory filing. CEO Tim Cook received Nearly $100 million; He said he plans to donate most of his fortune to charitable causes.

write to Tim Higgins at Tim.Higgins@WSJ.com