Costco has about 180,000 employees in the US, and 90% of them work by the hour. He will raise his minimum wage to $ 16 starting next week, Chief Executive Craig Jelinek said on Thursday at a hearing in the US Senate Budget Committee on workers’ salaries at large companies.
The move comes as Democrats in Congress seek to garner support for a $ 15 federal minimum wage. Senator Bernie Sanders is the driving force behind current Congressional pressure to raise the federal minimum wage, presenting a bill in the last month to increase it to $ 15 by 2025. President Joe Biden has also supported a $ 15 minimum wage. The federal minimum wage has been at $ 7.25 an hour since 2009, but an increasing number of cities and states are raising their minimum wage.
Costco (COST), based in Issaquah, Washington, increased its minimum wage to $ 14 in 2018 and $ 15 in 2019. The company says that 20% of its hourly employees earn the minimum wage.
More retailers and restaurant chains have also switched to a minimum rate of $ 15 an hour. Amazon (AMZN) increased his starting salary to $ 15 in 2018, while Target (TGT) and Best buy (BBY) increased its minimum to $ 15 last year. Walmart (WMT), the largest retailer in the United States, has a minimum wage of $ 11 and said last week that it plans to raise the wages of about 425,000 employees, a quarter of its workforce, to at least $ 13 an hour.
Arindrajit Dube, a professor of economics at the University of Massachusetts Amherst who studies the minimum wage, said the Costco measure would pressure rival employers like Amazon to match the $ 16 minimum.
While some companies have moved to $ 15 an hour or more, many business leaders are opposed to a $ 15 federal minimum wage. Some employers, especially small businesses, have struggled with raising the minimum wage to $ 15, saying that this could cause layoffs and even closings.
In a letter to Congressional leaders on Wednesday, the Business Roundtable suggested for the first time that raising the minimum wage should be linked to progress in defeating the coronavirus pandemic.
Also on Wednesday, Matthew Shay, president of the National Retail Federation, a lobby group for retailers, said in a call with reporters that “it makes no sense for the federal government to be in the business of dictating wages in an economy as broad and diverse. in scope as this is … It is better to let market conditions dictate “wages.
—Tami Luhby and Matt Egan of CNN contributed to this article.
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