Costco raises its starting rate for hourly retail jobs in the United States for the second time this year this week as businesses increase pay to attract and keep workers amid a labor shortage.
Last week, Costco informed employees that the minimum wage would increase from $16 to $17 per hour on Monday. Costco employs around 180,000 people in the United States, with 90% of them working on an hourly basis. Costco’s jobs new starting wage is $2 per hour higher than Amazon, Target, and other leading retailers’ minimum wage and $5 per hour higher than Walmart’s. The company has one of the lowest turnover rates in the retail business.
Costco’s newest wage increase comes as many stores, restaurants, and other service sector businesses increase pay, offer signing bonuses, and improve benefit packages in response to labor shortages.
Costco increased its minimum wage to $14 in 2018 and will raise it to $15 in 2019. The Issaquah, a Washington-based corporation, raised it to $16 per hour in February. The most recent increase was first reported by Business Insider. “These increases are part of Costco’s continuing efforts to ensure our hourly wages remain extremely competitive in the retail industry,” Costco CEO Craig Jelinek said in a memo to employees.
Companies are under pressure to raise wages as they compete for workers. According to the most recent Labor Department data, the average hourly wage for retail workers grew 3.8 percent in September compared to the same period last year.
Amazon, Target jobs, Best Buy, and other retailers have increased their beginning rates to $15 per hour in recent years. Amazon announced in April that it would raise hourly pay for 500,000 employees by $0.50 to $3.
Walmart increased its minimum wage from $11 to $12 per hour last month, while CVS and Walgreens said in August that they would hike beginning pay to $15 per hour. Wages in the private sector increased by 4.6 percent in September compared to the previous year.
Source: ABC7 / KGO-TV