move to lift its minimum wage to $16 an hour in March from $15 drew attention on Thursday after the warehouse club’s CEO Craig Jelinek testified before Congress.
Barron’s reported the higher wage in a Feb. 12 article that looked at the company’s many successes, including what may be the retailing industry’s lowest rate of theft, at just over 0.1% of sales.
Here’s what we wrote:
strong employee relations are an underappreciated aspect of its winning strategy. It pays well by retailing standards and has low employee turnover in an industry not known for that.
Its minimum wage for hourly workers, who make up 90% of its employees, is $15 an hour, rising to $16 an hour in March. The average wage is $23.50 an hour.
minimum wage is $11 an hour and average hourly pay is more than $14 an hour.
starting wage is $15 an hour.
annual employee turnover is 13% overall and falls to the 6% to 7% range for those on the job more than a year. Industry turnover is believed to be well above 20% annually.
Costco picks up about 90% of total health insurance costs, against an average of about 75% for corporate plans. Satisfied employees are less prone to steal from employers, with about two thirds of shrink generally attributed to employees rather than to customers.
The company’s approach was highlighted Thursday by the CEO Jelinek, who appeared at a hearing of the Senate Committee on the Budget. He said that the average wage for its hourly workers was around $24 an hour.
“This isn’t altruism,” Jelinek told the committee, saying that the company’s pay and benefits provided “a competitive advantage.”
“It helps in the long run by minimizing turnover, maximizing employee productivity, commitment, and loyalty,” he said.
Jelinek made his comments as lawmakers are debating raising the federal minimum wage to $15 an hour.
Write to Andrew Bary at [email protected]