Costco is raising pay — above $30 an hour for many workers — as the deadline looms for the company to reach a new contract with its unionized employees.

The powerful International Brotherhood of Teamsters represents about 18,000 Costco employees, or roughly 8% of the company’s U.S. workers. The union’s current collective-bargaining contract expires at the end of Friday, and the union members have voted to authorize a strike if negotiations fail.

Now Costco CEO Ron Vachris has announced pay increases for nonunionized workers over the next three years, according to an internal memo viewed by NPR.

In March, hourly wages for store clerks and assistants at the top of the pay scale will go up by $1 to $30.20 an hour, rising by another $1 each year after that. Wages for entry-level workers will increase by 50 cents to $20 an hour.

Costco Teamsters spokesperson Matthew McQuaid said the company wouldn’t be raising pay if not for the union’s pressure. It represents workers at Costco locations in California, Maryland, New Jersey, New York, Virginia and Washington.

“Costco is still shorting their workers because nonunion workers lack the retirement security of a defined benefit pension plan and the job protections that come with a union contract,” McQuaid said in an email.

The Teamsters contract with Costco expires at midnight on Friday. Workers are pushing for better pay and benefits, saying they should be rewarded for helping the chain achieve its record financial gains.

Costco representatives declined comment. The retailer is the third largest in the world by revenue, behind Walmart and Amazon.

Last year, Costco had similarly increased its wages by $1 at the top of the pay scale and 50 cents for others, the company said in its end-of-the year report. The chain’s pay is among the highest in retail, which has helped Costco maintain a lower turnover rate than most rivals.

Vachris' memo, dated Tuesday, named other planned changes, including vacation time for new workers in their first year.

“There’s a plain and simple reason Costco chooses to offer industry-leading wages” and various benefits, the memo said. “We believe our employees are the very best in the retail industry.”

Last week, Costco made news as its shareholders rejected a proposal by a conservative think tank pushing the company to roll back its diversity hiring practices. This made Costco an outlier as many U.S.-based corporations have begun retreating from diversity, equity and inclusion initiatives.

On Monday, 19 Republican state attorneys general wrote to Costco demanding the company repeal its DEI policies within a month.

News Source : https://www.opb.org/article/2025/01/31/costco-raises-pay-as-teamsters-union-threatens-strike/