Costco Raises Pay for Top Hourly Workers to Over $30 an Hour

U.S. retailers have been boosting pay and benefits for hourly employees in recent years as it’s gotten harder to find workers. (Stephanie Keith/Bloomberg News)

[Stay on top of transportation news: Get TTNews in your inbox.]

Costco Wholesale Corp. is raising pay for most of its hourly U.S. workers to more than $30 an hour amid contract talks with unionized employees.

The company will raise hourly pay for employees at the top of its pay scale over the next three years, CEO Ron Vachris wrote in a memo to staff this week that was viewed by Bloomberg News. In March, these workers’ hourly pay will rise by $1 per hour to $30.20, with additional $1 increases coming in each of the next two years.

Workers at the bottom of the scale will get raises of 50 cents to $20, according to the memo. The changes apply to employees at non-union locations.

Issaquah, Wash.-based Costco, which ranks No. 47 on the Transport Topics Top 100 list of the largest private carriers in North America, declined to comment. The company and the union that represents thousands of its workers are in negotiations over a new collective bargaining contract. The current contract is set to expire on Jan. 31, and Costco Teamsters — which represents less than 10% of the company’s roughly 219,000 employees in the U.S. — has voted to authorize a strike, demanding better pay and benefits.

Matthew McQuaid, a spokesman for Costco Teamsters, said in an email that while the union is pleased that workers will make more money, it was the group’s pressure that led to the increase.

Costco’s hourly U.S. employees typically start at an entry rate before getting periodic increases based on their time with the company until they hit the top of the scale. Because of the higher wages it pays, the retailer has a low rate of worker turnover and more than half of Costco’s hourly workers are in the top category. As of July, the retailer’s starting wage was $19.50.

Other benefits for non-union workers include an additional week of vacation after 30 years of employment and vacation for new employees during their first year.

U.S. retailers have been boosting pay and benefits for hourly employees in recent years as it’s gotten harder to find workers. While pandemic-era labor shortages have improved, for many chains it’s still tough to hire and retain employees. The mean hourly wage for U.S. retail workers stands at $14.12, according to government data.

Walmart Inc. said this month it would increase compensation for its market managers, who each supervise roughly a dozen store managers, with higher annual stock grants, bonuses and base pay effective in the company’s new fiscal year. The company ranks No. 1 on the private TT100. Walmart, Target Corp. and other big-box retailers have also raised pay for store workers in recent years.