ISSAQUAH, Wash. – Next week Costco will increase the starting wage for its U.S. employees by $1 to a maximum of $14.50 an hour, while other hourly wage rates will increase by 25 to 50 cents an hour.
The raises, effective June 11, 2018, will come from the company’s savings made from U.S. federal tax cuts this year, which lowered the corporate tax rate and aided large corporations. But the total increase is expected to cost the wholesale retail company $110 to $120 million before taxes. It also helps that Costco reported profits jumps of about 7% in its fiscal third quarter to $750 million, or $1.70 a share.
Nearly 90% of the 231,000 Costco employees are paid hourly and earn an average of $22.50 an hour. In a recent PayScale survey, 54% of Costco employees thought their compensation was fair. The company was number five on the 2018 Forbes list of America’s Best Employers.
Costco isn’t the only company to increase hourly wages: Walmart raised its starting hourly wage to $11, and Target had announced it would increase wages to $12 an hour later this year, and to $15 an hour by 2020.