The new rate is nearly double the federal requirement.
Costco is a favorite among shoppers, not just because it sells palates of our go-to snack foods, but because the company has a long-standing policy of treating its employees fairly. The chain of membership-only warehouse-style stores offers health benefits, stock options, pre-tax savings plans, and vacation to all full and part-time workers across its nearly 750 locations, and made Glassdoor's list of the best companies to work for in 2017. On an investors call yesterday, the brand announced it would be continuing that tradition by bumping up its minimum wage to at least $14 an hour and boosting pay for all 130,000 of its hourly workers.
Costco's current minimum wage stands at either $13 or $13.50, depending on the state. The increase will be $1 per hour across the board. Other hourly employees can expect to see 25 to 50 cents extra for each hour of work. The new wages will go into effect on June 11.
Costco's new base pay rate nearly doubles the federal minimum wage, which is currently just $7.25, a number that has not increased since 2009. The $14 mark is also close to that of activist group Fight for $15, which seeks a nationwide increase to what it deems a more livable wage. One reason for the increased wages could be the recent corporate tax cuts passed by Congress. According to Costco CFO Richard Galenti, the company's effective tax rate will drop from 35 percent last fiscal year to 28 percent this fiscal year under the new plan.
Costco raised its minimum wage most recently in 2016 to $13 or $13.50, an increase of $1.50 across the board. That increase was the first in nine years at the time. In a similar move, Walmart also increased its starting pay to $11 per hour earlier this year.