Costco to Increase Minimum Wage to $16 an Hour Because It’s “Good Business”
People love Costco for its samples, food court, unique offerings, and bulk-sized packages, but an announcement from the company at Thursday’s Senate Budget Committee meeting adds another one: their willingness to pay their employees more. A reporter from USA Today tweeted that Costco’s CEO W. Craig Jelinek announced in the hearing he plans to increase the company’s lowest wage from $15 an hour to $16, effective next week.
Jelinek was speaking at the meeting in favor of President Joe Biden’s push with Democratic lawmakers to raise the minimum wage from $7.25 — where it has been since 2009 — to $15 over the course of the next four years (this ultimately didn’t pass). His point was to underline how the company has found success in its commitment to paying competitive wages and giving good benefits — including paid vacation. And while the new increase goes into effect next week, he also pointed out that among their almost 200,000 employees, the average rate for hourly workers in the U.S. is already around $24.
Costco’s new rate raises the bar among other major retailers — Target and Amazon both previously matched Costco’s $15 minimum. The starting wage at the nation’s largest employer, Walmart, begins at $11.
The hearing’s title, “Should Taxpayers Subsidize Poverty Wages at Large Profitable Corporations?” makes clear what’s at issue, but Jelinek’s testimony went even further, calling the raises “good business” because it reduces employee turnover. He credits their employees with playing a huge part in the retailer’s success.
Other leaders from large companies were also invited to speak in the meeting but declined, according to Sanders, including those from McDonald’s and Walmart.