Why Costco Is Giving Some (But Not All) Of Its Employees A Raise

Costco is already known for its high wages, which set the company apart from many other retail businesses. Luckily for some Costco employees, their wages are about to get even higher, according to a report from Bloomberg — but unfortunately, a minority of employees will be missing out. And the reason why has to do with union negotiations.

The week of January 30, Costco announced that in March, hourly employees at the top of its pay scale will receive a raise of $1 per hour, boosting their rate to $30.20 an hour. Not only that, but this raise will be followed by two more $1 raises over the next two years.



Most of Costco's workers are part of this higher pay scale, but lower-earning workers will still receive a raise of $0.50, boosting their rate to $20 an hour. The catch, however, is that these pay raises don't apply to Costco's unionized employees.

Nonunion employees will also get new benefits, including an extra week of vacation for those who reach 30 years of work, as well as a vacation for new workers within their first year at the grocery chain. Inside Costco's fight with the Teamsters Costco may have a somewhat union-friendly reputation , but its pay raises for nonunion employees are a hardball tactic in its heated contract negotiations with its unionized stores, which are organized by the Teamsters. The Costco Teamsters are fighting for better pay and benefits, including more sick time and paid family leave.

The group represents fewer than 10% of Costco's approximately 219,000 U.S. employees.

The union says, however, that Costco has not negotiated in good faith and has rejected over 98% of workers' proposals. Despite their relatively small numbers, the Costco Teamsters have already authorized a nationwide strike with 85% support, while the existing contract expires imminently. While not as ruthless as Starbucks' alleged union-busting efforts , the tactic is designed to make unionized employees pressure the Teamsters to make a deal, with nonunion workers soon to enjoy a raise for which union workers are having to fight — and potentially strike.

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