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 Thursday in a Senate Budget Committee hearing, led by Sen. Bernie Sanders, to examine the salaries of major companies. Jelinek said the starting salary for Costco employees would rise to $ 16 next week, above the $ 15 the company instituted two years ago.
The initial salary scale places Costco above competitors, including Amazon, Target and Best Buy, who have a minimum wage of $ 15. Walmart’s starting salary is $ 11 per hour.
Jelinek said higher pay would boost workers ’retention and productivity.
“I want to keep in mind: this is not altruism,” Jelinek said. “At Costco, we know that paying good wages to employees and providing affordable benefits makes sense for our business and is a major competitive advantage for us.”
Walmart and McDonald’s workers testified at the hearing to demand that these companies raise the minimum wage.
Currently, the federal minimum wage is $ 7.25. Democrats are trying to push through a $ 1.9 trillion COVID-19 relief bill that would include a provision that would raise the federal minimum wage to $ 15 an hour for five years, a policy strongly opposed by Republicans.
That effort suffered a severe blow on Thursday when the Senate MP decided that the minimum wage provision should be removed from the bill., according to Democratic Senate aides, who spoke on condition of anonymity because the decision had not been made public.
A growing number of states have already raised the minimum wage to $ 15 an hour.
Costco’s announcement also comes when labor groups are demanding compensation for danger to the grocery store and other essential jobs, which some companies offered at the start of the coronavirus pandemic and then ended.
Costco has continued to pay an hourly premium of $ 2 to its workers per hour since March. Jelinek said Costco would end the premium as the one-year mark approaches, but would convert a portion of it through wage increases across pay scales.
Costco has 180,000 employees in the US Jelinek said more than half earn $ 25 an hour or more.