Costco Raises Pay To Over $30 An Hour For Non-Union Employees, Leaving 18,000 Union Members Waiting

31 Jan 2025 by Pamela N. Danziger · Forbes

Topline

Costco announced that all employees at its non-union stores will get a pay raise, just a day before employees at its 50 unionized locations are set to go on strike, according to Bloomberg.

Costco employee greeting customer and checking membership status, Costco, Florida. (Photo by: ... [+] Lindsey Nicholson/UCG/Universal Images Group via Getty Images)UCG/Universal Images Group via Getty Images

Key Facts

Hourly pay for non-union members at the top of Costco’s pay scale will get a $1 per hour raise to $30.20 per hour with a $1 per hour raise coming each of the next two years afterwards.

More than half of Costco’s employees are at the top of its pay scale, owing to extremely low turnover.

Non-union employees at the lower-end of the pay scale will receive a $0.50 per hour increase, raising starting pay to $20 per hour.

Additional benefits will also be granted, including an extra week of vacation after 30 years and vacation for new workers in their first year.

The extra pay and benefits will affect over 200,000 of Costco’s non-union employees as its 18,000 union members wait for a new contract.

Background

Costco has long been the retail employer of choice because of its industry-leading wages and benefits. This move will raise Costco a couple of notches higher and attract those seeking a retail career, rather than just using a retail job as a stepping stone.

Big Number

Overall, the retail trade is the nation’s number-one private employer, supporting some 16 million jobs directly at the end of last year. Median hourly pay for a retail sales person is just over $16 per hour, according to the Bureau of Labor Statistics.

Crucial Quote

“With these changes, we believe our hourly wages and benefits will continue to far outpace others in the retail industry,” CEO Ron Vachris wrote in a company memo announcing the changes.

Tangent

The company’s roughly 18,000 International Brotherhood of Teamsters union members working in some 50 of its 624 U.S. Costco stores will not be entitled to the same pay raise and added benefits. That will have to wait for a new contract with the current one set to expire at midnight tonight. Earlier this month the Teamsters voted to strike if an agreement isn’t reached. A Costco Teamsters’ spokesperson claimed that it was due to the group’s pressure that the pay increases were granted.

What We Don’t Know

We don’t know when the pay raises will take effect for non-union Costco employees. And we have no word yet about where contract negotiations stand. However, labor relations attorney Jane Jacobs shared with me that the Costco announcement could signal the company will meet the union demands. “Strikes are an extremely expensive proposition for everyone involved. There are no winners in a strike, including the employees who lose wages.”