Finance

Costco raising minimum wage to $16 an hour

Costco CEO Craig Jelinek told a Senate panel Thursday that the wholesale retailer will increase its starting wage to $16 next week, putting it ahead of competitors like Walmart and Target.

"Two years ago, we moved our starting hourly wage to $15 everywhere in the US. Effective next week, the starting wage will go to $16," Jelinek said in testimony Thursday before the Senate Budget Committee.

The chief executive noted that the majority of the retailer's in-store workers make more than $25 per hour.

"We're certainly not perfect, but we try to take care of our employees, because they play such a significant role in our success," he said.

Ranking member Lindsey Graham (R-S.C.) questioned Jelinek on whether minimum wage increases would hurt businesses, asking "if you run a restaurant or hotel and nobody can travel in the country and seating capacity has been reduced by half or more, the revenues are down and can you understand why an increased mandate from the government in terms of cost would be a devastating blow?"

"I can't understand why it would be a devastating blow. I think it's a devastating blow to the employees," Jelinek replied.

Responding to a similar line of questioning by Sen. Ron Johnson (R-Wis.), Jelinek said "I can tell you in my past experience that wages usually don't put people out of business, how you run your business will put you out of business."

The testimony comes as Senate Democrats and President Biden have both signaled a minimum wage increase to be a major legislative priority. The federal minimum wage last increased to $7.25 in 2009. Democratic National Committee Chair Jaime Harrison praised Costco's move on Twitter Thursday morning.

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