NEW YORK (AP) – Costco will increase its starting salary to $ 16 an hour, surpassing most of its main competitors.
Costco CEO Craig Jelinek announced the increase Thursday during a Senate Budget Committee hearing, led by Senator Bernie Sanders, to investigate wages at large companies. Jelinek said the starting wage for Costco employees would rise to $ 16 next week, up from the $ 15 that the company founded two years ago.
The starting wage scale puts Costco above competitors, including Amazon, Target, and Best Buy, who have a minimum wage of $ 15. Walmart’s starting pay is $ 11 an hour.
Jelinek said the higher wages would boost employee retention and productivity.
“I want to say, this is not altruism,” said Jelinek. “At Costco, we know that paying employees good wages and providing affordable benefits make sense to our business and represent a significant competitive advantage for us.”
Walmart and McDonald’s employees testified at the hearing to require those companies to raise their minimum wages.
The federal minimum wage is currently $ 7.25. Democrats are trying to push through a $ 1.9 trillion COVID-19 bill that would include a provision that would raise the federal minimum wage to $ 15 an hour for five years, a policy Republicans strongly oppose.
That attempt took a heavy blow on Thursday when the Senate MP decided that the bill’s minimum wage provision should be scrapped., said Democratic Senate aides, who spoke on the condition of anonymity because the decision had not been released.
A growing number of states have already raised the minimum wage to $ 15 an hour.
Costco’s announcement is also because workgroups are demanding risk compensation for groceries and other essential works, which some companies offered at the start of the coronavirus pandemic and later stopped.
Costco has continued to pay an hourly premium of $ 2 to its hourly workers since March. Jelinek said Costco would end the premium as the one-year mark approaches, but would convert some of it through pay increases across pay scales.
Costco has 180,000 employees in the US. Jelinek said more than half make $ 25 an hour or more.