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Costco to increase its minimum wage to $16 per hour, but CEO says the average pay for hourly workers is $24

Costco is raising its minimum wage to $16 an hour, leapfrogging competitors including Target, Best Buy and Amazon.

Costco CEO Craig Jelinek announced the increase Thursday at a U.S. Senate Budget Committee hearing on worker wages at large companies. Democrat lawmakers and President Joe Biden are pushing to raise the federal minimum wage to $15 from $7.25.

"Since Costco's inception, the company has been committed to paying the employees very competitive retail wages and providing them broad and affordable health care benefits," Jelinek said. "Two years ago, we moved our starting hourly wage to $15 everywhere in the U.S. Effective next week, the starting wage will go to $16."

But the membership-based wholesale chain already is paying many of its 180,000 U.S. workers a much higher rate. Jelinek said the average wage for hourly workers is around $24 per hour.

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Costco has 558 clubs in 45 states, Washington D.C., and Puerto Rico.

"We try to take care of our employees because they play such a significant role in our success," Jelinek said, who noted the longevity of employees and that Costco pays regular bonuses and offers vacation time. 

Craig Jelinek, Chief Executive Officer at Costco, speaks via video conference during a U.S. Senate Budget Committee hearing regarding wages at large corporations on Capitol Hill in Washington, Thursday, Feb. 25, 2021.

Sen. Bernie Sanders, I-Vt., convened Thursday's hearing titled "Should Taxpayers Subsidize Poverty Wages at Large Profitable Corporations?" to discuss proposals to change the minimum wage.

The Vermont independent railed against corporations like Walmart and McDonald's, saying hundreds of thousands of workers were being left behind.

Target raised the minimum wage for all of its U.S. hourly employees to $15 an hour in July 2020 and Best Buy raised its minimum to $15 in August. Amazon also increased the starting wage in 2018 to $15.

"While Costco, Amazon, Target, Best Buy, and other large corporations have all raised their minimum wage in recent years to at least $15 an hour, the minimum wage at Walmart has remained stuck at $11 an hour for three years," he said. "The result: 760,000 workers at Walmart, about half of their U.S. workforce, are paid less than $15 an hour."

Walmart announced last week it was raising pay for 425,000 employees starting March 13. The nation’s largest employer said the raise for store workers in its digital and stocking workgroups and would bring their average pay above $15 an hour. Starting pay rates for these employees move from $13 to $19 per hour based on the store location and market, Walmart said.

Walmart CEO Doug McMillon said the company has increased starting wages by more than 50% since 2015 and that the average wage in the U.S. will be at least $15.25 per hour. The retailer has about 1.5 million employees in the U.S. at more than 5,000 stores and Sam's Club locations.

Hobby Lobby's rate is even higher than Costco's at $17 an hour, an increase that went into effect in October. In 2014, the chain raised its full-time minimum wage to $15 and says that was "well before it became fashionable with other retailers."

A recent report released by the nonpartisan Congressional Budget Office said boosting the minimum wage to $15 per hour would raise income for millions of Americans and lift 900,000 people out of poverty.

But by 2025, when the hourly rate would hit $15 under a proposal before Congress, some 1.4 million fewer Americans would be working, the report concluded. That is because higher wages would increase the cost of producing goods and services and, in response, many employers would reduce their workforce or hire fewer employees, the report said.

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Contributing: Nicholas Wu, Michael Collins and Paul Davidson, USA TODAY

Follow USA TODAY reporter Kelly Tyko on Twitter: @KellyTyko

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Sours: https://www.usatoday.com/story/money/shopping/2021/02/25/costco-minimum-wage-hourly-pay-increase-2021/6816327002/

Costco To Raise Minimum Wage To $16 An Hour: 'This Isn't Altruism'

People wait to shop at a Costco in Texas on Feb. 20. Next week's pay increase would put Costco ahead of much of the industry. Joe Raedle/Getty Images hide caption

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Joe Raedle/Getty Images

People wait to shop at a Costco in Texas on Feb. 20. Next week's pay increase would put Costco ahead of much of the industry.

Joe Raedle/Getty Images

Costco plans to edge up its starting wage to $16 an hour starting next week, CEO W. Craig Jelinek said on Thursday, revealing plans that would propel his company ahead of most of its retail competitors.

Costco raised its starting pay to $15 per hour in 2019. More than half of Costco's hourly workers in the U.S. are paid above $25, Jelinek told the Senate Budget Committee during a hearing on pay at large retail and fast-food employers. Costco employs about 180,000 U.S. workers.

"I want to note this isn't altruism," Jelinek said. "At Costco we know that paying employees good wages ... makes sense for our business and constitutes a significant competitive advantage for us. It helps us in the long run by minimizing turnover and maximizing employee productivity."

Jelinek's testimony comes as Congress prepares to vote on legislation that aims to gradually increase the federal minimum wage to $15 an hour by 2025 — a campaign pledge by President Biden. The federal minimum has been stuck at $7.25 an hour since 2009.

Dozens of states and cities have surpassed that level; several — including Florida — are already on track to $15 an hour.

Earlier this month, the Congressional Budget Office said the phase-in of a $15 federal minimum wage by 2025 would increase pay for at least 17 million people and lift almost 1 million out of poverty, but also cut 1.4 million jobs.

Many large corporations have come out in favor of raising the federal minimum wage, although not specifically to $15 an hour. Retailers including Target, Best Buy and Amazon have raised their starting wages to $15 an hour.

In a recent survey of small businesses, however, the majority came out against a $15 federal minimum wage. A third said they would likely lay off workers if Congress passed the plan, according to a poll by CNBC and SurveyMonkey.

Amazon, the second-largest U.S. private employer, has been advocating in favor of a $15 federal minimum. Walmart, the largest private employer, has starting pay of $11, though last week said it would raise pay for almost half a million employees to between $13 and $19 an hour.

Both the CEO of Walmart and the Chamber of Commerce have come out in support of raising the federal minimum but argued that $15 an hour might be too high for some parts of the country. McDonald's in 2019 said it would stop lobbying against proposals to raise minimum pay.

Sours: https://www.npr.org/2021/02/25/971338686/costco-to-raise-minimum-wage-to-16-an-hour-this-isnt-altruism
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Here's How Much Money Costco Employees Really Make

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By Laura Williams Bustos, MSEd/July 9, 2020 1:25 pm EDT

Costco stores are practically everywhere. According to the job and recruiting website Glassdoor, Costco is the largest wholesale club operator in the United States, with Statista noting that it operated 782 warehouses worldwide as of 2018, serving tens of millions of cardholders.

What's truly remarkable about this giant retailer is that, for the most part, the company receives incredibly positive reviews from its employees. In fact, it has made Glassdoor's "Best Places to Work" list eight times since 2012, ranking number 55 (out of 100) in 2020. The only other (semi) similar retailers to make the list were the national grocery-store chain Trader Joe's, and Texas-based grocery store, H-E-B, both of which, comparatively, employ many fewer employees. 

So what keeps Costco's employees so happy? Well, for one thing, money. The company actively works to prevent turnover in a variety of ways that are outside the norms of the industry. If you're trying to decide if Costco is the best fit for your talents, skills, and goals or are just curious to learn more about the retail giant's treatment of its employees, you'll want to keep reading and learn how much money Costco employees really make.

Costco raises the minimum wage regularly

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You might assume that Costco cashiers aren't in it for the long haul. It's obviously not bad work in any way, but it may be viewed more of a job than a career. This is a challenge for retailers like Costco because employee retention is an incredibly important part of a successful business model. As The Balance Careers pointed out, the cost of employee turnover is incredibly high. It's expensive — not just in dollars, but in time — to search for, hire, and train a competent employee. 

One of the strategies Costco uses to retain good employees is to pay frontline workers well above the national minimum wage. According to Business Insider, Costco raised its minimum wages from $14 USD and $14.50 CAD to $15 USD and $15.50 CAD in 2019, while simultaneously providing bumps in pay for supervisors.

What's remarkable about this decision is that this dollar bump in minimum wage came less than a year after the company's previous one-buck bump in the minimum wage in summer 2018. Moves like this make it clear that the company is watching, listening, and responding to the needs of the industry and its employees. Costco understands that in order to keep good employees, they have to reward them for their service. A solid minimum wage is an excellent start.

Costco pays time and a half on Sundays

Depending on the company you work for, you may be accustomed to receiving holidays, like Thanksgiving, Christmas, or New Year's Day, off from work. Or, if you do have to work, you may receive holiday or overtime pay for working days that others get to spend celebrating with their families. However, in the United States, holiday pay isn't a guarantee or anything a company is required to offer, unless you have a contract that stipulates as much. 

Yet and still, Costco makes special pay a regular thing. No matter the job, no matter the total number of hours worked per week, Costco offers all of its employees time-and-a-half pay every single Sunday that they're scheduled to work, former Costco employee Meghan De Maria revealed in an article for Yahoo! Life.

Just do the math on that for a second. If a part-time Costco employee normally receives $15.00 per hour, they'll automatically receive $22.50 per hour — $7.50 more than usual — on Sundays.

Costco's average hourly salary is higher than you might expect

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Determining the average hourly wage for any given company, especially a company as large and wide-ranging as Costco, can be difficult. This is especially true when the company is continually assessing and adjusting its minimum wages for all employees, making older, self-reported employee wages gathered by third-party organizations essentially moot. For example, if an employee self-reported a minimum wage of $13 an hour in 2018, but subsequently received two $1 raises, bumping his or her hourly wage up to $15 per hour, the information gathered by these third-party organizations would greatly underestimate the average, self-reported wage of a company's employees. 

That being said, Payscale, a third-party aggregator of self-reported employee wages, notes that the average hourly wage for Costco employees is a little more than $17 per hour. This number obviously isn't something to scoff at, but it's important to note that much of Payscale's data comes from information sourced before the minimum-wage pay increases of 2018 and 2019. It can be reasoned, then, that the average hourly wage is even higher. In fact, according a 2019 Fox Business report, Costco's average hourly salary is $22.50 per hour.

All Costco employees are eligible for health benefits

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In the world of skyrocketing healthcare costs, uncertain government support of universal health insurance, and shady business practices aimed at cutting expenses by limiting employee access to employer-funded insurance, the concept of health benefits for all employees is practically unheard of in the United States. Yet former Costco employee Meghan De Maria revealed in an article for Yahoo! Lifethat all full- and part-time employees at Costco are eligible for benefits, including health insurance. The worth, in dollars, of this employee benefit is incredibly significant and shouldn't be downplayed when it comes to an employee's total salary package.

According to Forbes, employee benefits account for approximately 32 percent of employee compensation, with employee salaries accounting for 68 percent. In other words, if an employer is funding health insurance and other benefits, thereby picking up a huge chunk of expenses for employees, those are dollars that the employee doesn't have to spend out-of-pocket, essentially increasing his or her total wage by potentially thousands, even if this wage isn't "felt" in take-home pay.

Costco matches employees' 401k

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A starting hourly wage of $15 per hour looks a lot more appealing than the federal minimum wage of $7.25 per hour and, while take-home pay is obviously an important part of an employee benefits package, you don't want to ignore the additional "pay" that comes from other employer-provided benefits. 

The cost of employer-provided health insurance is an obvious example, but employer-backed retirement funds with an employer match is another way smart companies can recruit and retain good employees. As one employee revealed to Business Insider, Costco auto-enrolls all of its workers in a company 401K plan, offering 50 cents on the dollar match to employee contributions, up to a $500 total.

Costco employees who reviewed this benefit on Glassdoor seem to like the system (it received 4.4 out of 5 stars), and some noted that employees can contribute up to ten percent of their total salary to their 401K each pay period, although this appears to vary based on tenure with the company. This benefit can certainly add up to a nice retirement so it's not a shabby bonus at all.

Costco employees get some interesting non-monetary perks

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In addition to things you might find in a "typical" benefits package, like healthcare plans and retirement funds, Costco also extends a number of smaller perks to its employees that may not come with big price tags but give the company just a few more selling points. For instance, all employees are given free turkeys for Thanksgiving, one employee told Mental Floss. It has to be nice to pocket that extra cash around the holidays! According to Fox Business, all employees also receive a free executive membership to the store, which clocks in at a $120 value. 

The real value to this executive membership, though, can be much greater. According to Costco's website, holders of the Gold Star Executive Membership receive a two percent reward up to $1,000 on all qualified Costco purchases, discounts on Costco Services, and free roadside assistance for vehicles covered through Costco's auto insurance program. It's hard to put an exact dollar amount on the overall savings employees receive with these perks, but they're really just another way to help reduce Costco employees' overall cost of living.

Costco employees receive paid vacation

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After one year and 2,000 hours at Costco, the company rewards its employees with 40 hours, or the equivalent of one week, of paid vacation, according to a Reddit thread in which one user shared the company's vacation policy. But Costco's vacation policy isn't static — it improves with prolonged time at the company. After two years of service, paid vacation is increased to two weeks per year and after five years of service, it goes up to three weeks per year. 

There's also good news for employees who are dedicated to making a career at the company. After ten years of service, Costco grants four weeks of vacation per year and after 15 years of service, that goes up again to five weeks of vacation per year. So think about that: Costco employees receiving five weeks of vacation a year, plus between eight to ten paid holidays, plus any sick days they need to take based on their ongoing accrual, could be looking at the equivalent of around two paid months off of work per year. 

Costco general managers can easily make six figures

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For employees who work their way up to being a store's general manager, the payoff in compensation is significant. Pat Callans, executive vice president of administration at Costco told Reader's Digestin January 2020, the average annual salary for a general manager in the United States was $138,000. Obviously, that's enough to support a comfortable living in most cities around the country. But they can actually earn even more.

Callans went on to explain that managers can earn bonuses and stock-based compensation that far surpass the regular take-home pay. In fact, Callans stated that most GMs earn about triple the annual salary when these other factors are taken into account. As such, a GM might receive closer to $400,000 per year when all is said and done. 

Of course, running a Costco can't be an easy job considering you'd need to manage employees, inventory, quality assurance, and customer satisfaction. And you'd have to be able to effectively manage the stressors that go along with running a large retailer. Costco must be aware of these challenges, though, and in order to hire and keep good employees, they prioritize compensating them well. 

Some Costco employees make less than others

As with most big retailers, employees in entry-level positions — cashiers, cart collectors, stockers — at Costco tend to make the company's minimum wage of $15 in the United States.

Prior to Costco's 2019 bump in minimum wage, Business Insider compared the self-reported wage data from Glassdoor and PayScale for many of Costco's popular jobs. While this article can no longer provide deep insight into actual wage averages due to the outdated information on minimum wages, it does provide a pretty good picture of which roles pay more and which roles pay less. In addition to roles already mentioned, other positions you can expect to start at the minimum wage include gas station attendants and front end assistants (those checking membership cards and receipts).

Due to Costco's increased minimum wage, though, employees filling these positions are still making much more than they would if they were working for one of retailer's competitors.

Specialty positions can pay above Costco's minimum wage

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According to a Business Insider article comparing different self-reported salary information, it's evident that positions that require special training or skills can expect to be hired at a slightly higher hourly rate or, in some cases, may be offered a full-time annual salary. Examples of these positions include cake decorators, tire technicians, travel agents, and photo lab technicians. 

The higher starting wage makes sense. A college student waltzing in off the street without any prior training can't just start changing tires or developing photos professionally and you probably don't want a newbie without experience trying to decorate your grandma's birthday cake (even decorators with experience have been known to make pretty epic cake fails). So if you happen to have the training or skills necessary to be hired into one of these positions, you can expect your experience to be rewarded with a slightly higher wage than the minimum salary. 

Costco's pharmacy employees rake in the big bucks

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Costco is known for offering pretty great deals in its pharmacy and with a steady stream of customers heading to the retail giant specifically for this purpose, the company wants to keep their pharmacy employees happy. Of course, it's not just pharmacists that work within the pharmacy. There are also pharmacy technicians (some labeled as "certified" or "senior") and pharmacy cashiers, according to self-reported salary data on Glassdoor. 

Pay rates vary according to the role, with pharmacy managers averaging over $125,000 per year, technicians making almost $50,000 per year, pharmacy interns making roughly $19 per hour, and pharmacy cashiers making closer to Costco's minimum wage. Costco's pharmacists earn roughly $65 per hour, or $135,000 per year. 

Obviously, not just anyone can be hired into these roles — they require more specific education and training and, as such, receive significantly more compensation. Really, all of Costco's healthcare-based employees can expect to receive a significant salary. For instance, opticians can expect to make over $17 an hour while audiologists can earn, on average, close to $70,000 annually.

Costco drivers make bank

It doesn't matter if you're driving a forklift at a Costco facility or if you're a truck driver making long-haul shipments of the retailer's wholesale goods, those who hold the appropriate certifications for operating various vehicles can expect to be compensated well. This higher payment comes, in part, from the expense of receiving the appropriate training and certifications to take on these positions, but it's also a result of these positions carrying more risk than that of a standard store clerk. 

Just think about it. Loading and unloading pallets and navigating in and around a giant warehouse with a forklift — without doing major damage or causing an injury — takes practice and skill. We've watched The Office; we know. The people who invest in learning how to safely do this type of driving deserve a bump in pay. Likewise, the men and women who are willing to drive hundreds of miles each day on America's highways to make deliveries, often while spending time away from family and friends, likewise deserve to be well-compensated for their efforts.

According to self-reported salaries listed on Glassdoor, Costco forklift drivers make an average of $22 per hour and truck drivers average about $65,000 per year. 

At Costco, it all depends on the position you have

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As of 2019, Costco employed more than 250,000 workers worldwide, according to StatistaMany of those positions are in-store roles, but as Costco's website points out, they hire for numerous corporate jobs as well. These include careers in marketing, human resources, customer service, merchandising, journalism — the list goes on and on.

Payscale, which provides self-reported salary information for specific jobs, lists an incredible 23 pages of different self-reported roles and salary averages at Costco. The overall pay of any given Costco employee varies based on the position in question, the number of hours and years worked, and the level of education or training a position requires.

In general, though, Costco makes every effort to compensate its employees well, which is reflected in how its employees review the company; as of July 2020, Costco has a 4-star rating on Glassdoor and an impressive 89 percent approve of Costco CEO Craig Jelinek.

Sours: https://www.mashed.com/224884/heres-how-much-money-costco-employees-really-make/

Costco employees reveal how much they really make

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costco employee bagels
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Whether cashiers and cake decorators or forklift operators and pharmacy technicians, Costco employees have been earning decent wages for years.

Costco, a membership-only wholesale superstore with a "cult-like following," employs more than 245,000 workers and is known for providing perks to members along with benefits for its employees.

Read more: Costco is raising its minimum wage to $15 as the war for talent rages on

Previous reporting from Business Insider shows Costco has consistently raised its starting rate, which is well over the national minimum wage of $7.25. Business Insider's Mary Hanbury reported a raise to $14 an hour from $13 in 2018 and another increase to $15 an hour in March. The most recent change allows Costco to compete with Amazon, which raised its minimum to $15 an hour last fall.

To get a better idea of how much each type of employee in a Costco store makes, we looked at self-reported salaries for many roles on both PayScale and Glassdoor and ordered the positions from lowest to highest hourly pay. For some jobs, we found data from only one of the two sources.

Because the latest increase was implemented very recently, some positions' salary averages we found may not reflect the new minimum just yet, as the self-reported data we looked at spans the past few years.

While most hourly positions align with recent years' starting rates, some senior management roles — along with specialized positions such as pharmacy technicians — allow for some higher salaries (upward of $25 an hour).

Keep reading for a look at employee salaries throughout a Costco Wholesale store:

Cart collectors say they've earned averages close to $12 an hour.

Costco employee carts
John Gress/Reuters

PayScale-reported salaries averaged close to $12 an hour for cart collectors; Costco's new minimum wage mandates that these employees now earn at least $15 an hour.

Glassdoor average base pay: N/A

PayScale average hourly rate: $11.94

Stockers reported average hourly wages of $13 to $14.

costco aisle
a katz / Shutterstock.com

Stockers are responsible for arranging wholesale items on Costco's many shelves. Positions include both day and night shifts to keep stores stocked at all times.

Glassdoor average base pay: $14

PayScale average hourly rate: $13.41

Front-end assistants say they earn about $14 an hour.

Costco employee check receipts
Tim Boyle/Getty Images

Front-end assistants help check Costco membership cards and receipts upon customer entrance and exit.

Glassdoor average base pay: $14

PayScale average hourly rate: N/A

Meat wrappers at Costco say they earn about $14 an hour.

Sours: https://www.businessinsider.com/costco-store-employee-salaries-hourly-pay-glassdoor-payscale-2019-6

Base pay costco

Average Hourly Rate for Costco Wholesale Company Employees

Costco Wholesale Company Reviews

Overall Satisfaction

Ratings

Learning and Development

3.5

Corporate Culture, Work Flexibility, Perks.

Cashier in Winooski:

Pros: Employees are treated with respect and I like the corporate culture. Work flexibility works for me due to children. Busy place and time goes fast.

Future oppurtuinity.

Certified Pharmacy Technician (CPHT) in Cleveland:

Pros: After a number of years the salary will increase considerably.

Read More Reviews

Benefits

At Costco Wholesale Company, they provide a few retirement savings plans and welfare benefits. A large number of members of the American workforce, like Costco Wholesale Company workers, use employer-provided health coverage, …Read more

Retirement & Financial Benefits

Profit Sharing

Stock Bonus

Health & Insurance Benefits

Health Insurance

Dental Insurance

View more benefits

About Costco Wholesale Company

Also known as: COSTCO WHOLESALE CORP, Costco Wholesale Corp.

Years of Experience

This data is based on 459 survey responses.

Gender Breakdown

Male

54.1%

Avg. Hourly Rate: $13 - $28

Female

45.3%

Avg. Hourly Rate: $12 - $28

This data is based on 344 survey responses. Learn more about the gender pay gap.

Popular Locations for Costco Wholesale Company

  1. Seattle, Washington
  2. Issaquah, Washington
  3. Bellevue, Washington
  4. San Diego, California
  5. Los Angeles, California
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  7. Atlanta, Georgia
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  9. Minneapolis, Minnesota
  10. Alhambra, California

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Sours: https://www.payscale.com/research/US/Employer=Costco_Wholesale_Company/Hourly_Rate
Don't Buy A Costco Membership Until You Watch This

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Hiding under the canopies of the bus stops.

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