Costco is increasing its pay to more than $30 an hour for hundreds of thousands of workers, with clerks at the top of the retailer’s pay scale set to make almost $32 an hour in March.
Costco — which employs 272,000 people across the United States and in Canada — says its workers will soon receive hourly increases of 50 cents to one dollar, continuing its strategy of keeping ahead of the competition when it comes to worker compensation.
“We believe our hourly wages and benefits will continue to far outpace others in the retail industry,” Ron Vachris, the retailer’s president and CEO, said in a memo Tuesday to employees.
How much will Costco workers earn?
The Issaquah, Washington-based retailer will pay top-of-the-scale clerks $31.90 an hour and top-of-the-scale assistants $30.20 an hour, starting in March. The latest version of a three-year employee agreement calls for two additional $1 hourly increases in March 2026 and March 2027, Costco said.
Bottom-of-scale clerks and assistants are getting 50-cent hourly increases, making $21 and $20 per hour, respectively.
The company is also adding vacation time for new employees during their first year, and giving workers with 30 years of employment an additional week of time off, providing six weeks in all.
Costco’s union negotiations
Separately, the retailer and the union that represents thousands of Costco workers have been negotiating a new contract, with the current agreement set to expire Friday at midnight. Costco Teamsters have voted to authorize a strike.
The Teamsters union represents 18,000 Costco workers in six states: California, Maryland, New Jersey, New York, Virginia and Washington.
Union members say Costco needs to offer a labor contract that reflects its sales and profit growth. The company’s revenue rose 5% to $254 billion in its most recent fiscal year, which ended Sept. 1. It reported net income of $7.3 billion, double its profit in 2019.
“Costco has two choices: respect the workers who made them a success or face a national strike,” Teamsters General President Sean O’Brien said in a statement. “Costco Teamsters deserve an industry-leading contract that reflects the company’s massive profits. If Costco thinks they can exploit our members while raking in billions, we’ll shut them down.”
Costco told the Associated Press in a statement that it has long had a good relationship with the union and is negotiating in good faith.
“We have always treated our employees fairly and well throughout the history of our company,” Costco said.
It’s unclear if the strikes would close stores.
Costco, which operates 897 warehouses, including 617 in the U.S. and Puerto Rico, did not immediately respond to a request for comment.
According to the retailer’s annual report, about 95% of Costco workers are employed in its warehouses and distribution channels. About 5% of its workers are represented by unions, Costco stated.
Costco’s compensation and benefits are factors in its high employee retention rate, especially for the retail industry, the company has said. Last last year in the U.S. and Canada, Costco’s employee retention rate was about 93% for those with the company at least a year.
Costco in July 2024 increased its starting wage to at least $19.50 for entry-level positions in the U.S. and Canada. It also increased its highest wage scale by $1 an hour and took other steps to bring the company’s average rate for hourly workers to $31 by the end of 2024.
contributed to this report.
