Nearly 130,000 Costco employees are poised to get a pay raise starting on June 11.
In a Thursday call with investors, CFO Richard Galanti announced that the starting wage for Costco employees would go up $1 to $14 or $14.50 per hour, while other warehouse employees would see hourly raises of $.25 to $.50.
The raises are expected to cost the wholesale retail company $110 to $120 million before taxes. But, according to the Seattle Times, Galainti credited being able to give raises to last year’s tax bill, which lowered the corporate tax rate and provided a windfall for large corporations.
Costco is not the only company to give out raises or bonuses that they attributed to the tax bill: Two of Costco’s competitors have as well. In January Walmart raised its starting hourly wage to $11, and Target said it would raise its wages to $12 per hour by the spring and $15 hourly by 2020. (Yet other reports show that fewer than 45 of Standard & Poor’s 500 companies gave out bonuses in the four months after the bill went into effect.)
The raises are an attempt by retailers to attract employees in a tight job market, the Wall Street Journal notes.
Overall, Costco has a positive reputation for how it treats workers. Forbes and Statista named it America’s best employer in 2017, just ahead of Google, due to providing healthcare benefits for part-time employees and other perks. According to the Seattle Times, the June 11 wage increase is “independent” of the regular wage increases implemented by the company.
On Thursday, the company also reported a third quarter profit of $750 million and diluted share profit of $1.70, up from last year’s $700 million for the quarter and diluted earnings per share of $1.59. The company brought in $32.36 billion in both sales and membership revenue in the quarter that ended on May 13, a slightly over 12% increase from last year.
