Costco’s hourly employees are the latest U.S. retail workers to get a boost from the Trump tax cuts. On June 11th, Costco will increase the starting wage for its U.S. employees by a dollar to as much as $14.50 an hour, while other hourly wage rates will increase 25 to 50 cents an hour.
The raise, to be paid for with part of Costco’s savings from U.S. federal corporate tax cuts that took effect this year, will go to upward of 130,000 U.S. employees, costing the company about $110 to $120 million a year before taxes. The wage increases will help Costco keep to its strategy of offering employees total compensation that executives say leads the retail industry.
Costco competitors including Target and Walmart announced wage increases and bonuses for their employees tied to the tax cuts earlier this year. Costco officials suggested that the tax-cut related wage increase would likely be an addition to, rather than a replacement of, the company’s regular wage increases.
Despite having a small union-represented workforce of about 15,600 people, Costco regularly negotiates a new agreement with employees every three years with prescribed annual wage increases.
The next such agreement is due in March 2019. (Seattle Times)
