On Thursday, Costco announced that it will be raising wages for both new and current entry-level workers in the U.S. and Canada. The raise is small—$1.50 extra per hour—but it means that Costco will be paying workers at least $13 an hour, up from $11.50. This increase is significant because the company hasn’t raised wages for entry-level of workers in nine years, and its move to do so now might suggest that, as the economy adds jobs, retailers will have to start paying their frontline workers more in order to hold onto them.
Costco, one the nation’s largest employers, has been known to pay its employees much more than its competitors pay theirs. Some of Costco’s employees are unionized and its CEO has been outspoken in supporting a federal minimum wage above $10. As a result of all this, Costco workers tend to be satisfied in a way that’s unusual for the retail industry—in the company’s 30-some-year existence, there haven’t been any major strikes or protests.
Which prompts Costco to be contrasted with Walmart, the U.S.’s largest employer, which has a history of being stingy with compensation in order to keep its prices low. (Walmart employees have found their company to be extremely resistant to unionization efforts.) Costco’s average hourly wage (about $21 an hour) is $8 higher than Walmart’s, and that probably has something to do with the company’s low turnover rate.