- Costco is unconcerned about losing potential employees to Amazon despite the e-commerce giant’s higher minimum wage.
- CFO Richard Galanti said that Costco’s average pay still “dwarfs any other retail or retail-type entity out there” in a call with investors on Thursday.
- According to Galanti, Costco workers make an average of roughly $US22.50 per hour, with employees who have been at the retailer for years making into the mid-$US40 to $US50 range.
- On Tuesday, Amazon announced plans to raise minimum wage to $US15 per hour, following Costco raising its minimum wage to $US14 earlier this year.
Costco’s executives are confident the retailer is still on top when it comes to workers’ pay and benefits – even after Amazon’s much publicized wage increases.
“Our average US hourly wage is in the mid-22s, $US22.50 roughly, which we believe dwarfs any other retail or retail-type entity out there on a big scale,” Costco’s CFO Richard Galanti said on a call with investors on Thursday.
In June, Costco announced it was raising the minimum wage from $US13 to $US14. Galanti also emphasised that the retailer offers significant raises to employees every year, something many retail rivals do not do.
“An employee who has been here over a number of years can get up into the equivalent of mid-$US40s to the mid-$US50s on an hourly basis over time, as well as great health benefits,” Galanti said, in response to a question about Amazon’s wage hikes and attracting talent.
On Tuesday, Amazon announced plans to raise the company’s minimum wage in the US to $US15 per hour. The company also said it will work to gain Congressional support to increase the federal minimum wage.
Amazon’s announcement follows months of high-profile criticism of the company’s treatment of workers. In September, Sen. Bernie Sanders introduced the Stop Bad Employers by Zeroing Out Subsidies (BEZOS) Act. The bill, a clear reference to Amazon founder and CEO Jeff Bezos, would create a welfare tax for large employers with workers who receive federal benefits such as food stamps.
Costco, meanwhile, has long been known for providing pay and benefits that outpace industry rivals.
A number of retailers, including Amazon, Walmart, and Target have announced minimum wage hikes over the last year as the battle for talent heats up.
There were 757,000 retail-job openings across the United States in July, which is about 100,000 more than a year ago, The Wall Street Journal reported, citing the Bureau of Labour Statistics. The influx of jobs is coming at a time when unemployment is low, at 3.9% in August.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.