[US] Costco takes the lead on minimum wage

Costco has consistently been ranked among the best retail companies to work for, over the years. The retailer with a reputation for valuing its employees will demonstrate that strength again this week by offering something that its warehouse club segment rivals do not; a $16 minimum wage, RetailWire reports.

In testimony before the Senate Budget Committee last week, Costco CEO Craig Jelinek announced that the retail chain is increasing its starting wage from $15 to $16. (Link via original reporting)

According to Mr Jelinek’s testimony, raising the minimum is “not altruism”. “Paying employees good wages and providing affordable benefits makes sense for our business and constitutes a significant competitive advantage for us,” he said. 

“It helps us in the long run by minimising turnover and maximising employee productivity, commitment and loyalty. We encourage our employees to view Costco as providing a career rather than just a job.”

The Costco CEO’s Senate appearance coincided with a current debate on raising the national federal minimum wage of $7.25 an hour to $15, either all at once or over a period of years. The minimum wage was last increased in 2009.

Those in favour of the increase point to a shift in the demographics of workers in low wage jobs. There has been a change from teenage workers holding the majority of such roles to adults, with women, including those with children, holding down positions in predominantly service industry roles.

Opponents reportedly argue that forcing employers - particularly small to medium-sized businesses - to comply with the requirement will lead to job losses and business closures. Others support lifting the minimum wage in metropolitan regions but say that rural economies would be damaged by an increase.

Costco has consistently been ranked among the best retail companies to work for, over the years. The retailer with a reputation for valuing its employees will demonstrate that strength again this week by offering something that its warehouse club segment rivals do not; a $16 minimum wage, RetailWire reports.

In testimony before the Senate Budget Committee last week, Costco CEO Craig Jelinek announced that the retail chain is increasing its starting wage from $15 to $16. (Link via original reporting)

According to Mr Jelinek’s testimony, raising the minimum is “not altruism”. “Paying employees good wages and providing affordable benefits makes sense for our business and constitutes a significant competitive advantage for us,” he said. 

“It helps us in the long run by minimising turnover and maximising employee productivity, commitment and loyalty. We encourage our employees to view Costco as providing a career rather than just a job.”

The Costco CEO’s Senate appearance coincided with a current debate on raising the national federal minimum wage of $7.25 an hour to $15, either all at once or over a period of years. The minimum wage was last increased in 2009.

Those in favour of the increase point to a shift in the demographics of workers in low wage jobs. There has been a change from teenage workers holding the majority of such roles to adults, with women, including those with children, holding down positions in predominantly service industry roles.

Opponents reportedly argue that forcing employers - particularly small to medium-sized businesses - to comply with the requirement will lead to job losses and business closures. Others support lifting the minimum wage in metropolitan regions but say that rural economies would be damaged by an increase.