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Costco raises its minimum wage above rivals like Amazon, Target and Best Buy

President Biden's proposal to raise the minimum wage to $15 an hour through his $1.9 trillion Covid-19 relief package is facing pushback. CNN's John Avlon reports on the wage debate.

Posted: Feb 26, 2021 5:10 AM
Updated: Feb 26, 2021 5:10 AM

Costco will raise its starting rate for hourly store workers in the United States to $16 an hour, putting its starting wage above rivals such as Amazon, Target and Best Buy.

Costco has around 180,000 US employees, and 90% of them work hourly. It will hike its minimum wage to $16 beginning next week, chief executive Craig Jelinek said Thursday at a US Senate Budget Committee hearing chaired by Sen. Bernie Sanders on worker pay at large companies.

The move comes as Democrats in Congress seek to rally support for a $15 federal minimum wage. Sanders is the driving force behind Congress' current push to raise the federal minimum wage, introducing a bill last month to increase it to $15 by 2025. President Joe Biden has also backed a $15 minimum wage. The federal minimum wage has stood at $7.25 an hour since 2009, but a growing number of cities and states are raising their minimum wage.

Costco, based in Issaquah, Washington, raised its minimum wage to $14 in 2018 and $15 in 2019. The company says 20% of its hourly employees make the minimum wage.

More retailers and restaurant chains have also moved to a $15 an hour minimum rate. Amazon raised its starting wage to $15 in 2018, while Target and Best Buy bumped up their minimums to $15 last year. Walmart, the largest US retailer, has an $11 minimum wage, and it said last week that it planned to raise pay for around 425,000 employees, a quarter of its workforce, to at least $13 an hour.

Costco's average wage for hourly employees is around $24 an hour. Costco employees have also received an extra $2 an hour in hazard pay during the pandemic since March. Jelinek said the company would end the hazard pay, but convert some of it to permanent pay raises for employees.

Arindrajit Dube, a professor of economics at the University of Massachusetts Amherst who studies the minimum wage, said Costco's move would put pressure on rival employers such as Amazon to match its $16 minimum.

Although some companies have moved to $15 an hour or above, many business leaders oppose a $15 federal minimum wage. Some employers, particularly small businesses, have fought against raising the minimum wage to $15, saying it could prompt layoffs and even closures.

In a letter to Congressional leaders Wednesday, the Business Roundtable suggested for the first time that the minimum wage hike should be linked to progress in defeating the coronavirus pandemic.

Also on Wednesday, Matthew Shay, president of the National Retail Federation, a lobbying group for retailers, said on a call with reporters that "it doesn't make sense for the federal government to be in the business of dictating wages in an economy as broad and diverse in scope as this one is...It's best to let market conditions dictate" wages.

—CNN's Tami Luhby and Matt Egan contributed to this article.

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 313942

Reported Deaths: 7240
CountyCasesDeaths
DeSoto21580258
Hinds20330415
Harrison17879309
Rankin13594278
Jackson13429246
Madison10088217
Lee9970174
Jones8370163
Forrest7670152
Lauderdale7188241
Lowndes6387146
Lamar622486
Lafayette6184118
Washington5332133
Bolivar4801132
Oktibbeha462198
Panola4582106
Pearl River4506146
Marshall4435103
Warren4386121
Pontotoc420172
Monroe4107133
Union410076
Neshoba4030176
Lincoln3962110
Hancock378486
Leflore3493125
Sunflower335990
Tate333384
Pike3316105
Scott315773
Alcorn312768
Yazoo311469
Itawamba299777
Copiah296865
Coahoma295179
Simpson294988
Tippah288168
Prentiss279760
Adams278782
Marion269080
Leake267473
Wayne262641
Grenada261386
Covington258281
George247848
Newton246261
Winston227081
Tishomingo226667
Jasper221048
Attala214273
Chickasaw207757
Holmes188873
Clay185254
Stone182433
Tallahatchie178541
Clarke177980
Calhoun170532
Yalobusha164238
Smith162334
Walthall133945
Greene130533
Lawrence128524
Montgomery126742
Noxubee126734
Perry126338
Amite123042
Carroll121828
Webster114532
Jefferson Davis107033
Tunica105226
Claiborne102430
Benton99525
Humphreys96533
Kemper95728
Franklin83623
Quitman80716
Choctaw76318
Wilkinson67230
Jefferson65528
Sharkey50217
Issaquena1686
Unassigned00

Alabama Coronavirus Cases

Cases: 531404

Reported Deaths: 10985
CountyCasesDeaths
Jefferson765501522
Mobile41036805
Madison34789503
Tuscaloosa25788453
Montgomery24340589
Shelby23449249
Baldwin21154308
Lee15882171
Calhoun14511314
Morgan14306279
Etowah13843353
Marshall12232223
Houston10570281
Elmore10068205
Limestone9974151
Cullman9676194
St. Clair9661243
Lauderdale9427241
DeKalb8831186
Talladega8227176
Walker7241277
Autauga6926108
Jackson6814112
Blount6678137
Colbert6306134
Coffee5519119
Dale4838111
Russell441538
Chilton4296112
Franklin426082
Covington4129118
Tallapoosa4023152
Escambia393677
Chambers3573123
Dallas3551152
Clarke351161
Marion3122101
Pike310977
Lawrence300398
Winston274473
Bibb260964
Geneva250477
Marengo249564
Pickens234461
Barbour231057
Hale223077
Butler216069
Fayette212562
Henry188844
Cherokee185245
Randolph180542
Monroe177540
Washington167339
Macon159650
Clay156756
Crenshaw152557
Cleburne148941
Lamar142535
Lowndes138853
Wilcox127130
Bullock122841
Conecuh110529
Perry107726
Coosa107628
Sumter104732
Greene92534
Choctaw60724
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