Costco Wholesale Corp. is raising its minimum wage for the first time in nine years — by $1.50 an hour. As the second-largest U.S. retailer faces changes in the industry, and as competitors start to give workers a raise, the company announced it will start paying employees at least $13-to-$13.50 an hour, up from $11.50-to-$12.00 an hour.
Costco raising its minimum wage as competition for workers grows
The company announced the raise Thursday on a conference call with analysts. Costco says the increase in pay will cut its earnings per share slightly over the next fiscal year — expecting that the first quarter will see a one-cent decrease and then a two-cent decrease the following three quarters. Costco’s chief financial officer, Richard Galanti, is recognizing the importance of a raise like this for many of the company’s employees.
‘It will help, and it is important to do.’ said Galanti. ‘This is a physically challenging job. You’re on your feet, lifting cases, moving carts, and we thought it was time to do it.’
The highest hourly pay for a Costco employee is currently $22.50, and usually it takes about four years for a full-time employee to get to the top of that pay scale. Galanti said that those particular workers will get a 2.5% increase — which is about a $23.06 hourly wage.
Many other U.S. retailers are also feeling the pressure to boost wages — as unemployment falls below 5% and 14 states have raised their minimum wage this year.
Walmart, which operates the Sam’s Club chain, increased its minimum pay to $10 an hour this year and also gave a one-time pay raise to more than 1 million employees.