Costco has about 180,000 U.S. employees, and 90% of them work by the hour. It will increase its minimum wage from next week to $ 16, CEO Craig Jelinek said Thursday during a U.S. Senate budget committee on the payment of workers at large enterprises.
The move comes as Democrats in Congress try to support a $ 15 federal minimum wage. Senator Bernie Sanders is the driving force behind the current congressional push to raise the federal minimum wage, and last month introduced a bill to increase it to $ 15 by 2025. President Joe Biden also supported a minimum wage of $ 15. The federal minimum wage has stood at $ 7.25 per hour since 2009, but a growing number of cities and states are raising their minimum wage.
Costco (COST), based in Issaquah, Washington, raised its minimum wage to $ 14 in 2018 and $ 15 in 2019. The company says 20% of its hourly employees earn the minimum wage.
More retailers and restaurant chains have also moved to a minimum rate of $ 15 per hour. Amazon (AMZN) increased its starting salary in 2018 to $ 15 Target (TGT) and Best buy (BBY) lowered their minimum to $ 15 last year. Walmart (WMT), the largest U.S. retailer, has a minimum wage of $ 11 and said last week that it plans to increase the amount for about 425,000 employees, a quarter of its staff, to at least $ 13 per hour.
Arindrajit Dube, a professor of economics at the University of Massachusetts Amherst who studies the minimum wage, said Costco’s move would put pressure on competing employers like Amazon to reach its minimum $ 16.
Although some companies have moved to $ 15 an hour or more, many business leaders are opposed to a federal minimum wage of $ 15. and even result in closures.
In a letter to congressional leaders Wednesday, the Business Roundtable suggested for the first time that raising the minimum wage should be linked to progress in defeating the coronavirus pandemic.
Matthew Shay, president of the National Retail Federation, a lobby group for retailers, also said in a call to reporters on Wednesday that ‘it does not make sense for the federal government to dictate wages in an economy as broad and diverse in scope as this one is … It is best to have wage prescriptions prescribed.
—CNN’s Tami Luhby and Matt Egan contributed to this article.
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