Costco Raises Minimum Wage to $14 an Hour
ISSAQUAH, WA - While retail continues to combat on offering competitive wages for employees and prices for shoppers, Costco is boosting its hourly minimum next week by $1, to either $14 or $14.50, depending on the state. The jump applies to all U.S. hourly workers, a force of about 130,000.
Executives said the company was using some of its savings from last year’s U.S. tax overhaul to invest in its workforce, according to a report from The Wall Street Journal, which cited a lower corporate tax rate for companies like Costco with large U.S. operations.
The new wages take effect on June 11 and will nearly double the federal minimum wage of $7.25.
As we recently reported, the retailer saw an increase in both net sales and net income for its third quarter of the fiscal year, and Chief Financial Officer Richard Galanti estimated the annual cost of the wage increases will be between $110 million and $120 million pretax, according to the news source.
The company expects an effective tax rate of 28% this fiscal year, however, compared to about 35% last year, he said.
Will the move be echoed by other retailers as price and wage wars alike continue to wage? AndNowUKnow will report on the latest.