NEW YORK (AP) – Costco will raise its starting salary to $ 16 an hour, beating most of its main competitors.
Costco CEO Craig Jelinek announced the increase on Thursday at a Senate Budget Committee hearing, led by Senator Bernie Sanders, to examine salaries at large companies. Jelinek said the starting salary for Costco employees would rise to $ 16 next week, from $ 15 that the company instituted two years ago.
The starting salary scale puts Costco above competitors, including Amazon, Target and Best Buy, which have a minimum wage of $ 15. Walmart’s starting salary is $ 11 an hour.
Jelinek said the higher pay would increase worker retention and productivity.
“I want to note: this is not altruism,” said Jelinek. “At Costco, we know that paying good wages to employees and offering affordable benefits makes sense for our business and constitutes a significant competitive advantage for us.”
Walmart and McDonald’s workers testified at the hearing to demand that these companies raise their minimum wage.
The federal minimum wage is currently $ 7.25. Democrats are trying to pass a $ 1.9 trillion COVID-19 relief bill that would include a clause that would raise the federal minimum wage to $ 15 an hour over five years, a policy strongly contested by republicans.
That effort suffered a serious blow on Thursday, when the Senate parliamentarian decided that the minimum wage clause should be removed from the bill, according to Senate Democratic advisers, who spoke on condition of anonymity because the decision was not made public.
An increasing number of states have already raised the minimum wage to $ 15 an hour.
Costco’s announcement also comes at a time when labor groups are demanding payment for dangerous goods for groceries and other essential works, which some companies offered at the beginning of the coronavirus pandemic and later closed.
Costco has continued to pay its workers an hourly premium of $ 2 an hour since March. Jelinek said Costco would end the award when the one-year milestone approached, but would convert part of it through salary increases across all pay scales.
Costco has 180,000 employees in the USA. Jelinek said more than half earn $ 25 an hour or more.