Costco has developed a reputation for adopting worker-friendly policies, but its entry-level wage has gone untouched since Congress’ last increase to the federal minimum wage. The Washington Post reported that Costco is the latest company to agree that it’s time for a change.
…Costco hadn’t really had to raise that floor to attract workers, with its average wage for hourly employees reportedly topping $20 an hour. That’s well above other big retailers like Target and Walmart, who fall more in the $10 to $13 range; staying a little higher should allow Costco to attract the kind of better-than-average employees it wants.But with its competitors raising their bottom wages as well, that was no longer enough. On an earnings call, chief executive Robert Galanti explained that Costco reviews its payscale every three years, and usually raises just the top end – which right now is about $22.50. This year, they were boosting the floor as well, by $1.50, to $13.
Vox had a good piece last year, after Wal-Mart made a related announcement, noting that developments like these signal that companies want to keep attracting good talent and keep its workforce from departing to competitors, “which in turn signals that there’s increased competition to get good workers.”
The actual job numbers have been very encouraging of late, and every time companies like Costco raise their wages, it’s further evidence of a healthy labor market.
I realize, of course, that conservative readers are very likely pointing to this as proof of the free market working: congressional Republicans refuse to consider even a modest increase in the federal minimum wage, but in practical terms, the argument goes, it doesn’t much matter since private employers are making these decisions on their own based on the business cycle.
And while this is a nice argument, let’s not forget that plenty of American workers aren’t employed by one of the companies that have voluntarily approved an increase, which means those other folks are being left behind. For that matter, let’s also remember that without legal guarantees, the whims of the market may lead to reduced wages the next time there’s an economic downturn.
In other words, the case for a federal increase hasn’t really changed.
All of this, of course comes against a political backdrop, with a variety of Republican governors approving measures that prohibit cities and municipalities from raising their own local minimum wages. In the presidential race, each of the remaining GOP candidates oppose a federal increase, and Marco Rubio has gone so far as to suggest the minimum wage shouldn’t exist at all.