Costco, the popular wholesale retailer, has made headlines with its recent announcement of a significant pay increase for most of its workers in the United States. The company’s CEO revealed that the highest tier of hourly employees will now earn more than $30 an hour.
In a memo sent to staff earlier this week, Costco outlined its plans to raise the pay for all non-union stores in the United States to slightly over $30 an hour. This increase will only impact non-union employees and will be implemented in a phased approach over the next three years. The first year will see a $1 raise to $30.20 for workers at the top of the pay scale, followed by an additional dollar increase in each of the following two years. Entry-level workers will also receive a 50-cent raise, bringing their starting rate to $20 per hour.
According to reports from Reuters and Investing.com, Costco’s CEO, Ron Vachris, stated that these pay increases will far outpace others in the retail industry. The decision to increase pay comes at a crucial time, as members of the International Brotherhood of Teamsters union, representing over 18,000 Costco workers, have threatened a nationwide strike if contract negotiations are not successful before the end of January 31.
While the pay increase outlined in the memo does not apply to union members, who make up about 8% of Costco’s workforce, the outcome of the contract negotiations remains uncertain. “We’ve told Costco that our members won’t work a day past January 31 without a historic, industry-leading agreement,” said Sean M. O’Brien, Teamsters’ general president.
In addition to the pay increase, Costco has also faced scrutiny over its diversity, equity, and inclusion (DEI) practices. In January, the company’s shareholders and board rejected a proposal to halt these practices. Costco’s board chair, Tony E. James, emphasized the company’s commitment to inclusion without compromising merit or implementing quotas.
However, the Attorney Generals of 19 states have since sent a letter to CEO Vachris urging Costco to end what they perceive as unlawful discrimination imposed through its DEI policies. The letter calls for equal treatment based on merit rather than divisive and discriminatory practices. Costco has not yet publicly responded to the letter.
Overall, Costco’s decision to increase pay for its employees and its stance on diversity and inclusion reflect the company’s ongoing efforts to support its workforce while navigating complex social and legal issues.
