Costco to Raise Minimum Hourly Wage to $16 -- Update
February 25 2021 - 12:48PM
Dow Jones News
By Sarah Nassauer
Costco Wholesale Corp. will pay its U.S. workers at least $16 an
hour starting next week, the company's chief executive told
Congress on Thursday as lawmakers debate raising the federal
minimum to $15 an hour.
The warehouse retail chain's minimum U.S. wage has been $15 an
hour, the same as the starting wage at Amazon.com Inc. and Target
Corp. Rival Walmart Inc. recently said it would raise wages for
some workers but keep its starting wage at $11 an hour. Costco has
about 180,000 full-time and part-time U.S. employees.
Capitol Hill waited Thursday for the Senate parliamentarian to
weigh in on whether the chamber's rules would permit Democrats to
increase the minimum wage to $15 an hour as part of President
Biden's $1.9 trillion coronavirus relief package.
Costco has long paid its store workers more than most
competitors, in part to reduce turnover as part of its low-cost
operating model. Costco Chief Executive Craig Jelinek said at the
hearing Thursday that Costco's average wage for hourly workers is
$24 an hour. Walmart's average U.S. wage after recent increases
take effect will be more than $15 an hour, the company has
said.
"Although there's a lot of external focus on starting wages and
minimums, it is important to us that Costco employees have an
opportunity to make more than $15 or $16," he said, noting the
company offers regular raises, bonuses and healthcare benefits.
About 89% of workers are currently eligible for healthcare
coverage, he said.
"This isn't altruism," Mr. Jelinek said. "It helps in the long
run by minimizing turnover, maximizing employee productivity,
commitment and loyalty." In the U.S., employees average more than 9
years with the company, he said.
Compared with some big-box competitors, such as Walmart,
Costco's stores tend to be close to higher-income, urban centers
that typically offer workers higher wages generally. At Costco,
shoppers pay a membership fee for access to discounted, bulk goods,
a model that tends to attract higher-income shoppers willing to pay
a membership fee and more each shopping trip for a large amount of
goods.
Write to Sarah Nassauer at sarah.nassauer@wsj.com
(END) Dow Jones Newswires
February 25, 2021 12:33 ET (17:33 GMT)
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