This week Costco (COST) has increased its starting wage of the hourly store workers throughout the US for the second time this year as businesses boost pay to draw and retain workers in the middle of the labor deficit.
During the previous week, Costco had notified employees that it would raise their minimum wage from $16 per hour to $17, from Monday onwards. Costco employs almost 180,000 in the United States, and 90% of them work hourly. The new starting wage of Costco puts the chain, which has among the lowest turnover rates in the retail industry, that is the minimum wage of $2 each hour above Target (TGT), Amazon (AMZN), and other top retailers, and $5 per hour above Walmart’s (WMT).
Costco’s recent pay hike is due to many restaurants, retailers, and other service sector employers are increasing pay, providing signing bonuses, and sugarcoating their benefits packages in response to struggles employing workers.
In 2018, Costco raised its minimum wage to $14 and $15 in 2019. In February, the Washington-based company, named Issaquah, hiked it to $16 per hour. According to
Costco CEO Craig Jelinek, these hikes are part of Costco’s continuous endeavor to ensure extremely competitive hourly wages in the retail sector.
Pressure is mounting on companies to raise wages as they tussle for labor. Average hourly pays for retail workers were raised by 3.8% in September from the same time last year.
Other organizations, such as Target (TGT), Amazon (AMZN), Best Buy (BBY), etc. have hiked their starting wages to $15 each hour over the recent years. In April, Amazon announced that it’ll be raising hourly pay between $0.50 and $3 for 500,000 employees.
In September, wages across the private sector received a boost of 4.6% from the previous year.