For the second time in 2021, Costco has increased starting wages for its employees. During the first week of March, the retailer raised its minimum wage from $15 — its starting wage since 2019 — to $16.
In February, Costco’s CEO, W. Craig Jelinek, told the Senate Budget Committee that the practice of paying a living wage to employees was good business.
“I want to note: This isn’t altruism,” Jelinek told lawmakers. “At Costco, we know that paying employees good wages and providing affordable benefits makes sense for our business and constitutes a significant competitive advantage for us.”
Jelinek also said that more than half of the company’s employees make $25 an hour or more.
The retailer has a low turnover rate as well. Employees average more than nine years working for the company. More than one-third have been employed by the retailer for 10 years or more, and more than 12,000 U.S. employees have worked for Costco for at least 25 years.
Costco also provides employees with good benefits and bonuses. These include healthcare coverage for full- and part-time employees, paid sick time, vacation time, bonding leave for new parents, contributions to company-sponsored retirement plans, and twice-yearly bonuses for long-tenured hourly employees.
The retail industry continues to suffer a labor shortage, and several retailers, such as Amazon, Walgreens and Target, have increased pay to help attract and retain workers. However, many experts report that the term “labor shortage” is inaccurate, asserting that there is instead a lack of good jobs and that many workers are no longer willing to take on demanding and sometimes dangerous positions for low wages.
“In my past experience, wages don’t usually put you out of business,” Jelinek told the Senate Budget Committee. “It is how you run your business.”