Costco will raise its minimum wage to $16 an hour - more than Amazon and Target - in the hope employees will stay with the company for longer
Costco Wholesale Corp is raising the minimum wage for its hourly staff to $16 from next week, a dollar more than what its competitors Amazon.com Inc and Target Corp pay per hour.
The membership-only retailer's move comes as U.S. President Joe Biden plans to raise the minimum wage to $15 per hour by 2025, and a week after rival Walmart raised its hourly wage to an average of $15.
Costco's Chief Executive Officer Craig Jelinek made the announcement at a U.S. Senate Budget Committee hearing on worker wages at large companies.
Costco is to boost its minimum wage to $16 per hour from next week
Costco CEO Craig Jelinek said that he hoped by raising wages people would choose to stay and work with the company longer. He is pictured during a US Senate Committee on the Budget Hearing: "Should Taxpayers Subsidize Poverty Wages at Large Profitable Corporations?" on Capitol Hill in Washington on Thursday
'Since Costco's inception, the company has been committed to paying the employees very competitive retail wages and providing them broad and affordable health care benefits,' Jelinek said. '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.
'It takes a lot of time to interview, find employees, lot of labor involved just trying to hire individuals. We want people to stay with us,' Jelinek said, answering to Senator Bernie Sanders, who chairs the Senate Budget Committee.
'It's important to us that Costco employees have opportunities to make more than just $15 or $16 an hour. Costco employees receive regular increases for hours worked,' he said.
'We feel the experience level and loyalty of our employees is a significant advantage for our company,' Jelinek continued. 'Costco is what I know. I'm not an economist, a regulator or a legislator, and I don't pretend to know the methods or models that are right for any other large or small companies in any other industries.'
Issaquah, Washington-based Costco, which has over 180,000 employees in the U.S, has seen sales boom during the COVID-19 pandemic as consumers stocked up their pantries.
The company, which raised hourly wages to $15 in 2019, also offered a premium pay to workers during the virus outbreak.
Target implemented a $15 per hour minimum wage in July, while Amazon raised its minimum wage to $15 in 2018
'In my past experience, wages usually don't put people out of business, how you run your business will put you out of business,' Jelinek said at the hearing.
Even as big corporations raise their hourly wages, many small businesses have opposed a $15 federal minimum wage, saying it would lead to job cuts and closures.
The $16 an hour boost puts its starting wages above Target's and Amazon's.
Target implemented a $15 per hour minimum wage in July, while Amazon raised its minimum wage to $15 in 2018. Walmart's starting wage is $11 per hour.
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