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NEW YORK (AP) – Costco will increase its starting wage to $ 16 an hour, outperforming most of its major competitors.
Costco CEO Craig Jelinek announced the increase Thursday during a Senate Budget Committee hearing, chaired by Sen. Bernie Sanders, to examine salaries at large companies. Jelinek said the starting salary for Costco employees will drop to $ 16 next week, from the $ 15 the company instituted two years ago.
The starting salary scale puts Costco above its competition, including Amazon, Target, and Best Buy, which have a minimum wage of $ 15. Walmart’s starting wage is $ 11 an hour.
Jelinek said the higher pay would boost worker retention and productivity.
“I want to note: this is not altruism,” Jelinek said. “At Costco, we know that paying good wages to employees and providing affordable benefits makes sense to our business and is a significant competitive advantage for us.
Workers at Walmart and McDonald’s testified at the hearing asking these companies to increase their minimum wages.
The federal minimum wage is currently $ 7.25. Democrats are trying to push through a $ 1.9 trillion COVID-19 relief bill that would include a provision raising the federal minimum wage to $ 15 an hour over five years, a policy strongly opposed by Republicans.
That effort was hit hard on Thursday when the Senate parliamentarian ruled that the minimum wage provision should be removed from the bill., according to Democratic Senate assistants, who spoke on condition of anonymity because the ruling had not been made public.
A growing number of states have already raised the minimum wage to $ 15 an hour.
Costco’s announcement also comes as worker groups demand a risk premium for groceries and other essential jobs, which some companies offered at the start of the coronavirus pandemic and which ended later.
Costco has continued to pay an hourly premium of $ 2 to its hourly workers since March. Jelinek said Costco would end the bonus as it nears the one-year bar, but convert some of it through pay increases across all pay scales.
Costco has 180,000 employees in the United States. Jelinek said more than half earn $ 25 an hour or more.
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