Costco to raise minimum wage to $16 per hour, above Amazon, Target
Costco will raise its minimum wage to $16 an hour starting next week, CEO Craig Jelinek said during a Senate Budget Committee hearing 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'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.
FILE - Stock image of the façade of a Costco building.
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.
Sen. Bernie Sanders, I-Vt., chaired the Senate Budget Committee hearing, titled "Should Taxpayers Subsidize Poverty Wages at Large Profitable Corporations?" He said he invited Walmart CEO Doug McMillon to testify but he declined.
"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?" Sanders said, adding praise for Target and Costco for raising their starting wages. "If Walmart thinks they're going to avoid answering that question because they didn't show up today, they're deeply mistaken."
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Walmart's starting wage is $11 per hour.
"We feel the experience level and loyalty of our employees is a significant advantage for our company," Jelinek said. "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."
Senate Budget Committee ranking member Sen. Lindsey Graham, R-S.C., compared multibillion-dollar company Costco's situation to that of small businesses.
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"My concern is not really about Costco ... because you can absorb some increase in cost. I'm worrying about the small business owner who is struggling because COVID has reduced their ability to earn a living. Do you understand where I'm coming from?" he asked Jelinek. "Can you understand why an increase mandate from the government in terms of cost would be a devastating blow?"
"No, I can't understand why it would be a devastating blow," the CEO responded.
"You can understand why a restaurant in South Carolina who has got half seating capacity because of COVID, barely hanging on, it would be devastating to them to increase their costs in terms of doubling the minimum wage?" Graham said.
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"I don't know that I was suggesting doubling the minimum wage," Jelinek said. "My view is I'm not here to discuss a proposal."