Costco is raising their hourly minimum wage to $16 an hour for its 180,000 employees
As Congress hems and haws over what to do about the $15 federal minimum wage, Costco was like, hold my beer. Not waiting around for the government to make moves, Costco just announced that it’s adopting a $16 minimum wage for its 180,000 hourly workers starting next week.
NPR reports that during a U.S. Senate Budget Committee hearing, Costco chief executive Craig Jelinek testified Thursday that the giant warehouse store is raising their minimum wage to $16 an hour, up from the $15 an hour wage they enacted in 2019.
As one former New York Times reporter pointed out on Twitter, “that tops Amazon’s and Target’s $15 minimum and Walmart’s paltry $11 minimum.” Though Walmart’s $11 an hour is definitely “paltry,” the national minimum wage conversation is working, as Walmart also said last week that they would also soon be increasing their $11 minimum to $13-$19 per hour for “425,000 store associates in frontline roles.”
The most surprising move of all is that Costco will increase the minimum wage to $16 next week, which is remarkable because the $15 federal minimum wage won’t even go into effect this year if passed. If enacted, the federal minimum wage will slowly creep up year over year but won’t actually hit that $15 per hour threshold until June 2025. By 2025, Costco will be probably (I don’t know! I’m just spitballing!) be giving everyone $25 per hour starting pay!
Currently the federal minimum wage is set at $7.25 an hour and hasn’t changed since 2009, which is insane. If you live in a state with a high cost of living, the $7.25 an hour rate might come as a shock as many states and counties have significantly higher minimum wages than that. For example: San Francisco just enacted a $16.07 minimum wage.
Costco’s CEO says they don’t want the praise, that $16 isn’t “altruism,” it’s the reasonable thing to do.
“I want to note this isn’t altruism,” Jelinek said. “At Costco we know that paying employees good wages…makes sense for our business and constitutes a significant competitive advantage for us. It helps us in the long run by minimizing turnover and maximizing employee productivity.”
CNN reports that Costco’s average wage for hourly employees is around $24 an hour, but that 20% of their employees make the minimum wage. Costco employees have also received an extra $2 an hour in hazard pay during the pandemic and Jelinek said the company is ending the hazard pay next week, but might just convert some of it into permanent pay raises.
Where else can you find properly compensated employees, free samples, a hot dog and a soda for $1.50, and a gallon of Nutella? Costco. That’s where.