Costco customers react to retailer’s new $16 minimum wage

Costco customers react to retailer’s new  minimum wage

a store front at day

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As if mega-toilet-paper rolls and rotisserie chickens weren’t enough to get members through the door, Costco announced Thursday it would raise employees’ base pay from $15 to $16 an hour — prompting shoppers’ calls to support the warehouse retailer.

Some 180,000 U.S.-based Costco employees will begin earning a minimum of $16 an hour starting next week, Costco CEO Craig Jelinek announced Thursday at a Senate hearing on minimum wage. 

“This isn’t altruism,” he said. “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.”

The Costco announcement came about two years after the company began paying its employees a minimum of $15 an hour — matching Amazon which started paying $15-an-hour wages to employees in 2018. Both are based in Seattle.

The news spurred several Twitter users to express their support for the membership-based retail chain.

“I was thinking I might let my Costco membership lapse since I moved and the closest warehouse is now an hour away…but, nope. They do right by their workers and I will happily drive an hour to support employers who support their employees,” one person wrote.

Many others applauded the company’s move:

Others echoed Sen. Bernie Sanders’s call on Thursday for Walmart the nation’s largest private employer, to follow Costco’s lead.

That company hasn’t increased its employee base wage of $11 an hour since 2018 — though it announced last week it would offer half its workforce, or 730,000 employees, a $15-an-hour wage.

Walmart spokeswoman Anne Hatfield said that “the average wage for our U.S. hourly workforce is at least $15.25 an hour.” She also told MarketWatch that “all of our warehouse associates make more than $15 an hour.”

The Costco news also came as Democratic lawmakers, and the independent Sanders, awaited word from the Senate parliamentarian on whether a minimum-wage increase is permissible in legislation taking the budget-reconciliation route, as the $1.9 trillion relief page is aimed toward doing. If it does pass muster, and the pandemic relief bill is passed and signed, the federal minimum wage would rise to $15 an hour by 2025. Republican senators, including Lindsey Graham of South Carolina, have said small businesses won’t be able to afford the increased cost of doing business.

Two Democratic senators, Joe Manchin of West Virginia and Kyrsten Sinema of Arizona, also have expressed concern about raising the federal hourly minimum wage to $15. 

“Putting $15 out there right now just makes it very difficult in rural America, [where] we have small businesses,” Manchin reportedly told the Wall Street Journal this week. 

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