Costco Raises their Minimum Wage to $16
This puts them higher then Amazon, Target, Best Buy and Walmart
Supermarket giant Costco has announced that the company will raise its minimum wage to $16 an hour for workers in the United States beginning next week.
The announcement was made by the company’s Chief Executive Craig Jelinek on Thursday at a Senate Budget Committee hearing. The hearing was about worker pay at large companies. By raising their wage to $16 an hour they will now have a higher minimum wage than competitors like Amazon, Target, and Best Buy.
This is the first wage increase for the company since 2019 when they instituted a $15 minimum wage. Costco employs around 180,000 workers with 90% of them working hourly. The company estimates that about 20% of their hourly workers are making the minimum wage. The average hourly rate at Costco for hourly employees is around $24. Workers have also been receiving an extra $2 an hour in hazard pay since March. At the hearing, Jelinek said those bonuses would be coming to an end, but some of the workers would see their bonuses converted into permanent raises.
The raises at Costco could put more pressure on Amazon, Best Buy, and Target to raise their minimum wages. All three companies have been at $15 an hour since at least last year. All are higher than the world’s largest retailer, Walmart, which has an $11 minimum wage, although last week the company announced plans to increase it to $13 an hour.
The move by Costco comes as President Biden is trying to get a $15 minimum wage increase passed through Congress. Currently, the federal minimum wage is stuck at $7.25 and hasn’t been increased since 2009. With many large corporations now paying over $15 an hour and some states, including Florida, on track for a $15 minimum wage, the opposition to increasing the wage may not be as great as in previous years. Amazon, the second-largest US private employer, has even been advocating for the increase, including running ads in support of it. While it may seem like a contradiction for a company that is so cost-conscious, data-driven and anti-union, it is a huge PR boon for the company, and it prevents Walmart from undercutting Amazon’s prices by paying their workers less.
About 15,000 Costco employees are represented by the Teamsters, mostly in Southern California and the northeast.