Costco is raising its employees’ minimum wages to $ 16 an hour

Costco will increase its starting salary to $ 16 an hour, outperforming most of its major competitors.

Costco CEO Craig Jelinek announced the increase Thursday during a Senate Budget Committee hearing, led by Senator Bernie Sanders, to investigate salaries at top companies. Jelinek said the starting salary for Costco employees would rise to $ 16 next week, up from $ 15 set by the company two years ago.

The starting salary scale puts Costco above its competitors, including Amazon, Target, and Best Buy, who have a minimum wage of $ 15. Walmart’s starting salary is $ 11 an hour.

Jelinek says the higher salary would increase employee retention and productivity.

“I want to point out, 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.”

Employees at Walmart and McDonald’s 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 pass a $ 1.9 billion 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 effort took a heavy blow on Thursday when the Senate MP decided that the bill’s minimum wage provision should be dropped, said Democratic Senate aides, who spoke on condition of anonymity because the decision had not been published.

A growing number of states have already raised the minimum wage to $ 15 an hour.

Costco’s announcement also comes as workgroups are demanding payment for dangerous living conditions 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 a premium of $ 2 an hour 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.