Costco Wholesale Corp. is set to raise its minimum wage for the first time in nine years by a $1.50 an hour as the labor market bounces from a high of 10.8 percent in 2008.
Today, the unemployment figures have dropped to 4.9 percent; thus, the rivalry between competitors for labor has forced a pay day raise for workers.
The American-owned-membership-only Warehouse club, Costco Wholesale Corporation, not wanting to be caught napping, has pushed the envelope by offering at least $13-to-$13.50 an hour to workers, up from $11.50-to-$12 an hour.
Consequently, the company will see its earnings cut for the next three months by 1 cent and by 2 cents in the following three quarters, according to company’s spokesperson.
Wal-Mart Stores Inc., which operates the Sam’s Club warehouse-style chain, a Costco competitor, increased wages to $10 an hour this year and gave an increase to more than 1 million workers.
Costco didn’t say how many of its 117,000 employees would get a raise.
“It will help, and it is important to do,” said Richard Galanti, Costco’s chief financial officer. “This is a physically challenging job. You’re on your feet, lifting cases, moving carts, and we thought it was time to do it.”
Costco’s highest hourly pay is about $22.50, and the company plans to give those workers about a 2.5 percent raise this year, Galanti said. It takes a full-time Costco employee about four years to reach the top of the pay scale, he said.
Costco reported latest earnings fell 8.7 percent to $546 million, or $1.24 a share. Analysts had estimated $1.28 a share, on average. Same-store sales in the U.S., a closely watched measure by investors, increased 4 percent, excluding the negative impact of lower gasoline prices and foreign-exchange rates. That compared with an estimate of 4.9 percent.
Yvad Billings, Readers Bureau, Fellow
Edited by Jesus Chan
Do you want to add feedback to this story? Please add comment in box below.
Like our Facebook page https://www.facebook.com/TheReadersBureau
Follow us on Twitter https://twitter.com/readersbureau21