Following in the footsteps of employers such as Costco and Bank of America, CVS Health announced plans Wednesday to raise its company-wide minimum wage to $15 an hour by summer 2022.
The Woonsocket, Rhode Island-based company, which is the parent of Hartford health insurer Aetna, said its minimum hourly wage will increase first to $13 an hour on Sept. 5 and rise to $15 an hour by July 2022.
During a second-quarter earnings call with analysts Wednesday morning, CVS Health CEO Karen S. Lynch said the change will primarily affect retail staff and pharmacy technicians.
“Attracting and retaining top talent across our businesses is critical as we continue to redefine what it means to meet people’s health needs,” Lynch said. “These wage increases will have a meaningful impact on our colleagues and their families while helping the communities we serve prosper. Today’s announcement is the latest in a series of investments in our people, including bonuses and benefit enhancements throughout the pandemic.”
Chief Financial Officer Shawn Guertin said the raises will cost about $600 million over the next three years.
Approximately 65% of CVS’ hourly workers already make more than $15 per hour, according to company officials.
CVS Health operates a sprawling retail pharmacy division and pharmacy benefit manager Caremark, in addition to Aetna.
It was not immediately clear Wednesday how much of a difference the new policy will make to Connecticut-based CVS employees. On Aug. 1, the statewide minimum wage rose to $13 an hour, in advance of the company’s schedule. Connecticut’s minimum hourly pay rate will increase to $14 in July 2022 and $15 in June 2023.
2Q results
Meantime, CVS Health reported growth in revenues but a drop in overall net income for the second quarter.
The firm reported earnings of $2.98 billion, or $2.26 per share, in the April-June period, down from $2.79 billion, or $2.10 per share, in the corresponding quarter one year prior.
Company officials attributed the slide to higher healthcare benefit utilization rates, which had dropped significantly in the second quarter of 2020 due to the coronavirus pandemic. The decline was partially offset by increased prescription and front store volume.
When asked if the spread of the COVID-19 Delta variant could impact business during the remainder of 2021, Guertin said he’s heard that some hospitals and healthcare networks are again delaying elective procedures but cautioned that it’s still too early to make any long-term predictions.
