Costco announced yesterday that it will raise its wage floor nationwide to $16 an hour.
According to the Seattle Times, "The update directly applies to about a fifth of the more than 160,000 Costco employees who work hourly, accounting for 90% of Costco’s U.S. workforce, CEO Craig Jelinek said at a U.S. Senate committee hearing on how large companies pay their workers.
"The pay bump, which takes effect next week, pegs baseline wages at the Issaquah-based wholesale club above those at competitors Amazon and Target, which have instituted $15 wage floors in recent years. The minimum wage at Walmart, the largest employer in America, is $11, although the company said last week that it was raising the wages of 425,000 workers and that about half of its U.S. workforce would earn at least $15 an hour."
The Times goes on: "'This isn’t altruism. At Costco, we know that paying employees good wages and providing affordable benefits makes sense for our business and constitutes a significant competitive advantage for us,' Jelinek said. The company’s relatively high wages minimize turnover and maximize productivity, he said."
- KC's View:
The difference between Costco and a lot of retail entities is that Costco seems to understand that its growth is dependent on satisfied customers who continue to pay their membership fees and shop at its stores - and that is dependent on a strong employee base that makes customers happy. That's a priority and a core value.
At a lot of retailers, the priority and core value is keeping labor costs as low as possible - even if, in some cases, part of the value equation is customer service.
You'd think more businesses would understand the wisdom of Jelinek's words. If they did, there might not even be a debate over a national minimum wage.