In a bid to attract more quality workers, Costco says it will raise the minimum wage for entry-level workers for the first time in nine years.
Costco announced the wage hike during an investor call on Thursday, saying it will pay workers $1.50 more per hour for stores in the U.S. and Canada starting as early as this month, The Associated Press reports.
The raise will bump overall pay for entry-level workers to $13 or $13.50 from $11.50 or $12 per hour.
Costco Chief Financial Officer Richard Galanti says that while the wage increase will hurt the company’s earnings for the current quarter, it was something Costco simply had to do.
In fact, he told analysts he believes the company needs to offer top salaries at all levels. Costco’s highest hourly wage is currently $22.50, but even those employees are expected to receive a 2.5% increase at some point this year, Bloomberg reports.
“You’re on your feet, you’re lifting cases, you’re pushing carts at these entry-level jobs,” Galanti said during the investor call. “And so we thought it was time to do it.”
The pay increase was also seen as a way for Costco to retain its current workers and attract new employees, Craig Rowley, an analyst for consultant group Hay Group’s retail, tells the AP, noting that the turnover rate for part-time retail associates is around 67%.
Costco is just the latest retailer to lift entry-level pay for employees. After years of pressure from workers and advocates Walmart began increasing its hourly pay for all employees last year. The most recent increase came last month when the company boosted pay for 1.2 million workers to at least $10 an hour from $9 an hour.
Costco Hikes Entry Level Wages for First Time Since 2007 [The Associated Press]
Costco Will Raise Minimum Wage as Competition for Workers Grows [Bloomberg]