Costco is boosting pay as a strike looms — but for everybody

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Costco is set to raise hourly pay for many of its U.S. store workers, but the wage boost isn’t universal.

According to Reuters, which cites a memo sent to employees, the increase will roll out over three years. Top-scale workers — those in more senior or specialized roles — will see their hourly pay rise by $1, to over $30; it’ll climb another $2 per hour over the next two years, the memo reportedly said. Meanwhile, employees at the bottom end — typically newer workers or those in entry-level jobs — will get a 50-cent increase, pushing their hourly rate to $20.

The proposed pay bump comes as a potential nationwide strike looms. The Costco (COST+0.98%) Teamsters union, representing over 18,000 workers, recently voted in favor of a strike if a new contract isn’t reached by Friday, Jan. 31. About 85% of union members authorized the walkout, demanding higher pay, better benefits, and improved working conditions.

The wage increase would also come amid Costco’s record profits. In fiscal 2024, Costco reported $254 billion in revenue and $7.4 billion in profits. Despite this, union leaders argue that Costco has been reluctant to meet the demands of workers who want a more equitable contract.

In the memo sent to employees, CEO Ron Vachris emphasized that the company believes these pay increases, along with existing benefits, will “far outpace others in the retail industry.” However, the Teamsters argue that Costco isn’t living up to its reputation, especially considering its financial success.

“We’ve told Costco that our members won’t work a day past January 31 without a historic, industry-leading agreement,” said Sean M. O’Brien, Teamsters’ general president, in a statement. With the clock ticking and negotiations at a standstill, a strike appears increasingly likely unless a resolution is quickly reached.

Neither Costco nor the union immediately responded to Quartz’s requests for comment.

The demand for higher wages and better conditions from Costco workers echoes similar movements at other major retailers, including Amazon (AMZN+1.91%) and Starbucks (SBUX-0.26%), where employees went on strike over the holidays. These actions highlight the growing pressure on corporations to address worker demands amid soaring profits.

Separately, the impending strike comes amid Costco’s diversity, equity, and inclusion (DEI) battle. Earlier this month, shareholders overwhelmingly voted to keep the retailer’s DEI program intact, pushing back as industry standards rapidly shift to align with the policies of President Donald Trump.

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