Costco to Raise Minimum Wage to $16, Exceeding Some Rivals

Costco next week will raise its minimum wage to $16 an hour, putting the membership-based retailer's minimum above that of many rivals.
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Costco  (COST) - Get Report beginning next week will raise its minimum wage to $16 an hour, putting it above many competitors, Chief Executive Craig Jelinek said Thursday at a congressional hearing.

The hearing focused on employee pay at big companies. President Joe Biden and many Democrats in Congress have expressed support for more than doubling the current federal minimum wage of $7.25 to $15.

Many individual states and cities already have set the floor at that level, and other companies have boosted their minimums as well.

The Issaquah, Wash., membership-based warehouse retailer pays about 20% of its workers the minimum. It previously pulled its minimum wage to $14 in 2018 and to $15 in 2019, CNN reports.

Walmart  (WMT) - Get Report said last week that it would boost wages for about 25% of its workforce -- 425,000 out of a total 1.5 million -- to at least $13 an hour. Its minimum wage is now $11. 

The Bentonville, Ark., retail giant promised to ultimately raise wages to an average of more than $15 per hour. Target  (TGT) - Get Report and Best Buy  (BBY) - Get Report raised their minimums to $15 last year, CNN reports.

Costco’s stock recently traded at $337.68, down 0.9% on a sharply down day for the major Wall Street indexes. Costco has risen just 8% over the past year as investors favored online retailers.

Nonetheless, “the firm’s food and fuel offerings drive traffic and suspect that Costco is poised to thrive even as digital sellers expand,” Morningstar analyst Zain Akbari wrote in December. Akbari pegs fair value on the stock at $332.

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