NEW YORK (AP) – Costco will increase its starting wage to USD16 an hour, surpassing 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 wages at major companies. Jelinek said the starting wage for Costco employees would rise to USD16 next week, up from USD15 the company instituted two year ago.
The starting wage scale puts Costco above competitors, including Amazon, Target and Best Buy, which have USD15 minimum wages. Walmart’s starting pay is USD11 an hour.
Jelinek saying the higher pay would bolster worker retention and productivity.
“I want to note: this isn’t altruism,” Jelinek 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.”
Workers from Walmart and McDonald’s testified at the hearing to demand those companies raise their minimum pay. The federal minimum wage is currently USD7.25.
Democrats are trying to push through a USD1.9 trillion COVID-19 relief bill that would include a provision hiking the federal minimum wage to USD15 an hour over five years, a policy strongly opposed by Republicans.
That effort suffered a serious blow on Thursday when the Senate parliamentarian decided the minimum wage provision must be dropped from the bill, according to Democratic Senate aides, who spoke on condition of anonymity because the decision hadn’t been released.