Costco Raises Pay to Over $30 an Hour for Most Store Workers
Employees at non-union facilities will receive raises ranging from 50 cents to $20, according to the memo.
A new collective bargaining contract is being negotiated. The current contract expires on Friday and a local union representing nearly 9% of Costco's approximately 219,000 US employees has voted to authorize a strike over pay and benefits.
Matthew McQuaid, a spokesperson for the Teamsters representing Costco workers, stated in an email that although workers will be earning more, it was the union's efforts that led to the raise.
Tough Industry
Research shows that the turnover rate for retail workers is significantly higher than the average in all other US industries, exceeding a rate more than 70% above the norm.
The COVID-19 pandemic has greatly exacerbated the issue, and even though some labor shortages that arose during the pandemic have eased, many chain businesses are still struggling to find and keep employees. The average hourly wage for retail workers in the US currently stands at $14.12, based on federal data.
Costco's hourly US employees usually start at a base hourly wage that increases periodically based on how long they've been working for the company, until they reach the highest possible rate. Because it pays its workers a higher wage, the retailer has a relatively low rate of employee turnover and more than half of Costco's hourly workers have reached the top pay level. As of July, Costco's minimum hourly wage was $19.50.
Additional benefits for non-union employees include an extra week of vacation after 30 years of service and vacation time for new employees during their first year of work.
Large retailers such as Walmart and Target Corporation have increased pay for their store employees over the past few years. According to Target, in 2022, new employees' hourly wages can reach up to $24, depending on the specific job and local market conditions.
Walmart is raising compensation for its market managers, who oversee about a dozen store managers each. These higher annual stock grants, bonuses, and base pay will be effective as of the company's new fiscal year. Walmart has around 440 market managers in the US. The company also increased compensation for store managers last year, giving them the potential to earn more than $500,000.
For $24 an hour, taking the next step toward a goal of paying $25 by 2025.
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