Costco has announced to increase their minimum wages to $17 an hour. The company was offering $15 per hour starting wage back in 2019 and it was increased to $16 an hour last year. In view of the on-going labor shortage crisis Costco has once again raised the minimum wage. The hikes salary plan is implemented from 25th October 2021.
Labor Shortage Crisis in U.S.
Costco said that the decision is taken to make our wage structure competitive with the market. In the recent times all the employers are offering higher wages to attract workers. In addition, employers are also offering hiked wages to existing employees so they can be retained. During the pandemic service and retail industry employers are finding it difficult to fulfill their staffing needs. This has forced the employers of these sectors to revise their wage structures. Recently, Starbucks has also raised their minimum salary to $15 per hour.
Costco’s Competitive Edge
Business Insider reported that Costco is considered as a good employer. They provide benefits like paid vacations and healthcare coverage to its employees and average tenure of an employee is around 9 years. Almost half of the Costco’s workforce earn over $25 an hour. In these times companies like Costco are trying to seek competitive advantage in a tight job market as most of the US workers are dissatisfied with low wages and lack of benefits.
“Effective October 25, 2021, we will adjust the starting hourly wages for new employees in the U.S. to $17.00/hour for Service Assistants, $18.00/hour for Service Clerks and $18.50/hour for Meat Cutters,” read the memo. “Current U.S. employees making less than these rates will be moved up to these rates on their scales, and their goal hours will be reset. Please contact your GM or Payroll Clerk with any questions.”
There are many on-going workers strikes in US. Many companies are facing threats of strikes from union workers. Keeping in view the challenges of potential strikes and labor shortages, employers feel the need to raise the wages to survive in these testing times.
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