The move comes as Congress continues to debate raising the federal minimum.

On Thursday, Costco CEO W. Craig Jelinek appeared in front of the U.S. Senate Budget Committee, during a hearing called "Should Taxpayers Subsidize Poverty Wages at Large Profitable Corporations?" Jelinek told the committee that Costco's starting hourly wage had been set at $15 per hour for the past two years, but starting next week, the company plans to give those employees a pay rise to $16 per hour.

"I want to note this isn't altruism," he said. "At Costco we know that paying employees good wages [...] makes sense for our business and constitutes a significant competitive advantage for us. It helps us in the long run by minimizing turnover and maximizing employee productivity."

Costco Announces Raising Minimum Wage to $16 An Hour
Credit: Mario Tama / Staff/Getty Images

Jelinek added that, although the ongoing debate about the federal minimum wage receives "a lot of external focus," Costco also believes that its 180,000 employees should make more than that, through the bonuses and annual salary increases based on the number of hours worked. According to Yahoo Finance, at Costco, full-time employees can receive two salary increases every year, while part-time workers receive one pay raise per year. Jelinek said that Costco workers also receive two bonuses every year, which can add up to as much as $4,000.

"In the U.S., our employees average over nine years of service with the company," he said. "Over 60% of U.S. employees have five or more years with Costco, and over one-third have more than 10 years. We're very proud of the fact that more than 12,000 of our U.S. employees have worked for Costco for 25 years or more. Again, we feel the experience level and loyalty of our employees is a significant advantage for our company."

The federal minimum wage has been set at $7.25 per hour since 2009. Senate Democrats have been advocating for an increase to $15 per hour, and had hoped to include that wage boost in the $1.9 trillion coronavirus relief bill. On Thursday, nonpartisan Senate parliamentarian Elizabeth McDonough said that would not be permitted under the rules for budget reconciliation. (Budget reconciliation allows the Senate to pass bills with a simple majority; in this case, it means that no Republican votes would be required for the legislation to pass.)

"We are deeply disappointed in this decision," Senate Majority Leader Chuck Schumer (D-NY) said in a statement reported by CNBC. "We are not going to give up the fight to raise the minimum wage to $15 to help millions of struggling American workers and their families. The American people deserve it, and we are committed to making it a reality."

Meanwhile, Costco seems to be ahead of the game.