Costco, which is known for offering hourly wages that exceed those offered by many other retailers, will once again prove its competitiveness in the industry by giving workers a raise scheduled for next month.
CEO Ron Vanchris' Announcement: Hourly Wage Increase
CEO Ron Vachris announced that starting pay rates for service assistants, service clerks, and meat cutters in the US, Puerto Rico, and Canada will increase by $1 per hour. At the same time, employees who are not at the starting rate or the top-of-scale rate will also see an increase of $0.50 per hour in their wages, according to a memo to employees obtained by Business Insider.
According to the memo, the increase raises the lowest wage for hourly workers to $19.50 per hour, an increase of 5.4% for the lowest earners.
Vachris emphasized the company's ongoing initiative to maintain competitive hourly wages in the industry. By July 22, the new rates will apply to all hourly workers regardless of their position on the company's pay scale.
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Costco's Wage Competitiveness in The Industry
The median employee earned $50,202 in annual pay and benefits, an increase from $45,450 in 2022, surpassing earnings at Walmart, where employees made $27,136, and Target, where employees made $25,993, as per Business Insider.
The popular warehouse chain raised hourly wages by $0.50 in March, marking this month's second significant yearly wage increase. According to ZipRecruiter, the current average hourly pay for a Costco employee in the United Statesstands at $22.20.
According to Yahoo News, Costco increased its minimum wage to $16 in February 2021, up from $15 since 2019, with former CEO Craig Jelinek describing higher wages as "good business" that helps the company decrease turnover.
Costco, Being a Premier Retail Employer
Costco's not perfect, but they are dedicated to caring for their employees, who play a pivotal role in the company's success, Jelinek said. Costco is widely recognized as one of the premier retail employers, consistently ranking among companies with the highest employee satisfaction, where employees enjoy benefits such as paid vacation and healthcare eligibility, according to a Business Insider survey. As of February, half of Costco employees earn more than $25 an hour, with an average tenure of nine years.
In an earnings call in May, Vanchris said that he had worked hand in hand with Jelinek, including serving alongside him as president for the past two years, making the CEO transition seamless. Since January, Vanchris has dedicated his efforts to collaborating closely with global teams to uphold the delivery of top-quality merchandise at competitive values for members. He expresses deep pride in Costco's employees, attributing the consistent results to their strong dedication to both members and each other.
In the memo, Vanchris thanked Costco workers and advised them to contact their corresponding General Manager or Payroll Clerk for further inquiries.
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