WASHINGTON, DC: Joining other major U.S. retailers who have announced a hike in minimum wage for employees, Costco has said it will bump up its starting hourly pay to US$16, or about one dollar more than competitors, such as Walmart, beginning this week.
"Two years ago, we moved our starting hourly wage to $15 or more everywhere in the U.S. Effective next week, the starting wage will go to $16," CEO Craig Jelinek said, during testimony before the U.S. Senate Budget Committee.
While noting there is "a lot of external focus" on the hourly wage, he said it is important to pay workers more "than just $15 or $16 an hour", Yahoo Finance reported.
Jelinek pegged the average minimum wage for Costco employees at $24. The figure includes a combined biannual bonus of $4,000.
The pay increases for Costco staff are linked to the number of hours of work, he noted. While full-time employees get two pay increases per year, part-timers see one pay hike.
The salary hikes continue until employees reach the top of the pay scale, which is also raised each year, Jelinek added.
"In the U.S., our employees average over nine years of service with the company. Over 60 percent of U.S. employees have five or more years with Costco, and over one-third have more than 10 years. We're very proud of the fact that more than 12,000 of our U.S. employees have worked for Costco for 25 years or more. Again, we feel the experience level and loyalty of our employees is a significant advantage for our company," Jelinek said during the Senate panel hearing.
Amid growing support for a federal minimum wage hike in the Congress, several retailers have announced increases in minimum hourly rates.
Retail major Walmart, the largest private employer in the U.S., is set to roll out a pay hike for 425,000 store employees, effective March 13 this year.
With the pay increase, Walmart said, 730,000 of its U.S. store associates, or nearly half of its workforce, will earn $15 or more per hour.
The retailer has pegged the average hourly wage for its U.S. workforce at $15.25 per hour.
Meanwhile, Signet Jewelers, the world's largest retailer of diamond jewelry, has decided to raise the minimum wage for all its US employees to $15 per hour, beginning in the spring of 2022. The company has 22,000 employees in the U.S.
Earlier, in January this year, Starbucks CEO Kevin Johnson had revealed that the minimum wage at "roughly one-third" of Starbucks' retail partners in the U.S. is now $15 per hour or more.
He said he expects all partners in the US to offer a rate of $15 per hour in the next two to three years.