Costco announced it will increase hourly wages for its American workers to more than $30 per hour. The memo said the company will increase hourly pay for its top-of-the-scale employees over the next three years.
Which Costco workers will receive a raise?
Costco employees at the bottom of the pay scale will receive raises of 50 cents to $20 an hour, according to the reported memo. The changes will also apply to nonunion workers.
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The big box store and Costco Teamsters union, representing thousands of workers, negotiated over a new collective bargaining agreement.
What does it have to do with current negotiations?
The current contract expires on Friday, Jan. 31, and Costco Teamsters, which represents slightly less than 10% of the company’s roughly 219,000 employees nationwide, voted to authorize a strike for better pay and benefits. About 85% of union members voted in favor of the strike earlier this month.
A Costco Teamsters spokesperson told Bloomberg that the union is happy workers will be taking home higher wages. The union attributed pressure from workers to Costco’s decision.
Costco said in a statement to Reuters that with the pay increases and its benefits, it continues to “far outpace others in the retail industry.”
Bucking the trend
In recent years, more U.S. retailers have increased pay and benefits for hourly employees to recruit and retain employees in an industry linked to low pay and hectic schedules.
A 2022 study by business consulting firm McKinsey and Company found that the quitting rate for retail workers is over 70% higher than other industries in the U.S.
However, due to the higher wages and benefits Costco offers, it has a low rate of employee turnover, Bloomberg reported.
