Costco, Starbucks Raise Starting Wages

The retailers are staying competitive amid “The Great Resignation.”

October 28, 2021

U.S. $1 Bills

ALEXANDRIA, Va.—Costco and Starbucks have raised their minimum wages to attract job candidates amid U.S. labor market shortages.

Costco raised its starting wage for hourly store workers in the U.S. from $16 an hour to $17, reports CNN. This is the second time this year Costco has raised its wages—in February, Costco raised its minimum wage to $16. Costco has around 180,000 U.S. employees, and 90% of them work hourly. The raise allows Costco to pay $2 above Target and Amazon’s minimum wage and $5 above Walmart’s.

Starbucks also announced it will raise wages at least twice next year, which would bring its starting pay to $15 an hour by next summer and its average pay to $17, reports CNBC. The company will give baristas who have been with Starbucks for at least two years a 5% raise in late January. Employees who have been with Starbucks for five years or more will receive a raise of up to 10%. The second pay increase will be in the summer, which will bring its average wage up to $17 an hour. Current average hourly pay is $14 an hour.

Convenience retailers are also raising wages to stay competitive. Rutter’s and Sheetz both raised their starting pay this year, and Wawa, Casey’s and many other retailers offer hiring bonuses. In 2020, the average full-time associate starting wage at a convenience store was $11.89 an hour, which was up 40.5% in the past 10 years, according to the NACS State of the Industry Compensation Report® of 2020 Data.

In what has been called “The Great Resignation,” Americans are leaving their jobs in droves, and employees younger than 35 are leading the way. In August, 4.3 million people quit their jobs, according to the Bureau of Labor Statistics, not including retirements.

Workers are quitting in search of higher pay, more flexibility and remote options. Sixty-eight percent of U.S. adults are happy in their jobs, which is down from 84% a year ago, according to a CivicScience survey. Yet, 40% of those who quit their jobs said that they’re in a better financial position than before the pandemic.

To help convenience retailers attract and retain top-notch people, NACS partnered with the nonprofit Good Jobs Institute in January 2020 to bring the Good Jobs Strategy to the industry. (Costco also utilizes the Good Jobs Strategy.)

The Good Jobs Strategy, which is a combination of investment in people and smart operating choices, increases employee productivity, motivation and contribution and promotes operational excellence. Case studies show that implementing the Good Jobs Strategy can grow a business and increase customer loyalty.

Retailers can access the Good Jobs Calculator, designed exclusively for NACS and the convenience industry. This tool allows retailers to use their own data and customized assumptions about the amount of improvement or uplift achievable, and executives can run scenarios on the bottom-line impact of a Good Jobs system.

A recent NACS webinar explored how retailers can attract and hire team members today and in the future. From virtual hiring to job shadowing, retailers are employing a host of ways to find and connect with potential workers.