Costco has announced a pay increase for most of its hourly workers, with wages set to rise above $30 per hour. According to a memo obtained by Reuters, the company will increase pay for its highest-paid employees by $1 in the first year, bringing their hourly rate to $30.20. They will receive additional $1 raises in the following two years.
The memo highlights that these pay increases, along with Costco’s benefits, are expected to continue setting the company apart from other retailers in terms of employee compensation.
For workers at the lower end of the pay scale, hourly wages will rise by 50 cents, reaching $20 per hour.
Costco, the third-largest retailer in the world by revenue, trails only Walmart and Amazon, as reported by Deloitte.
Costco Announces Pay Hike Amid Union Strike Vote
The pay increase from Costco comes as unionized workers, represented by the Teamsters, recently voted to authorize a nationwide strike. This vote comes as new contract negotiations are entering the final stages, with a deadline set for Friday.
The Teamsters stated that the vote was a response to the company’s ongoing refusal to negotiate fairly and its failure to offer a contract that aligns with Costco’s record-breaking profits. The union made this announcement through a social media post earlier this month.
The Teamsters, which represents over 18,000 Costco workers, announced that 85% of its members voted in favor of authorizing a strike. Teamsters spokesperson Matthew McQuaid claimed that the recent pay increase from Costco was a direct result of the pressure the union has been applying.
McQuaid criticized Costco’s actions, calling the pay hike “fake generosity” and argued that the company is not worker-friendly. He emphasized that the 18,000 unionized workers are aware of their value and are determined to secure fair compensation.
Costco has grabbed headlines for other initiatives
Last week, Costco shareholders rejected a proposal put forward by a conservative think tank, which called on the company to examine the potential business risks of its diversity initiatives. According to preliminary results shared by Costco chairman Hamilton “Tony” James, over 98% of the votes were against the proposal.
Costco Chairman Hamilton “Tony” James emphasized that the company’s success is due to the hard work of over 300,000 employees who serve their members daily. He stressed the importance of ensuring that all employees feel valued and included, as this helps convey those same values to customers. James, along with other board members, had urged shareholders to reject the proposal concerning the company’s diversity, equity, and inclusion policies ahead of Costco’s annual meeting.
After the vote, 19 Attorneys General sent a letter to Costco CEO Ron Vachris, urging the company to discontinue its diversity, equity, and inclusion (DEI) initiatives.