Costco is raising its starting hourly wage to $16, CEO Craig Jelinek said on Thursday.
“Since Costco’s inception, the company has been committed to paying employees very competitive retail wages and providing them broad and affordable health care benefits,” Jelinek said during a Senate Budget Committee hearing. “Two years ago we moved our starting hourly wage to $15 everywhere in the U.S. Effective next week, the starting wage will go to $16.”
Jelinek said that more than half of Costco’s U.S.-based employees earn an hourly wage of more than $25.
Costco is the latest among a slew of major retailers who have announced wage hikes in recent years because of state regulation and political pressure, but also to gain an edge over competitors. Before the pandemic throttled the economy, unemployment rates were low — leading retailers to compete for scarce talent in a tight labor market. Over the last few years, Amazon, Walmart and Target have gradually raised their starting wages to $15 per hour while also offering workers perks like tuition reimbursement programs.
The increase also comes amid growing support in Congress for a federal minimum wage hike. A $15 wage is included in the $1.9 trillion Covid-19 relief bill currently on the table, and it calls for a multi-year phase-in of the increase by 2025. President Joe Biden backs doubling the current federal minimum wage of $7.25.
The issue has gained popularity in recent months as grocery store workers, restaurant staff and other frontline employees continue to bear an outsized share of the pandemic’s hardships. Democrats have used this dynamic as leverage to increase their hourly compensation, but bipartisan support for the measure has proven to be an uphill battle. Sens. Mitt Romney, R-Utah, and Tom Cotton, R-Ark., announced a proposal on Tuesday that would raise hourly wages to just $10 by 2025.
Rep. Alexandria Ocasio-Cortez, D-N.Y., and a major advocate for the wage hike, denounced GOP proposal in a tweet.
Committee Chair Sen. Bernie Sanders, I-Vt., has championed increasing minimum wage for years.
“Why should working people be subsidizing some of the wealthiest families and largest corporations in America because of the starvation wages they pay their workers?” he said Thursday.
Leticia Miranda contributed.