‘Not even enough to buy a Costco hot dog’: Costco announces raises for employees. Then the backlash starts

Costco announced wage increases for its hourly U.S. employees, but not all workers are celebrating equally. Long-term employees at the top of the pay scale will see their wages rise from $29.20 to $30.20 an hour (a $1 per hour raise) starting in March 2025, with two more $1 raises in 2026 and 2027.

Entry-level employees, meanwhile, will receive just a 50-cent bump, bringing their hourly rate to $20.

Costco raises wages — and draws mixed reactions

Costco touts its competitive pay structure as a reason for low turnover and high worker satisfaction, yet the discrepancy in wage hikes between veteran and entry-level employees raises questions about how the company values its newest hires. Critics argue that with inflation and cost of living on the rise, a 50-cent raise doesn’t go far enough to support new workers.

Still, Costco remains one of the highest-paying retailers in the country, a fact that CEO Ron Vachris emphasized in an internal memo. Their wages and benefits “will continue to far outpace others in the retail industry,” he wrote. 

Teamsters union and social media claim that the raises aren’t good enough

Costco is in the middle of contract negotiations with the Teamsters union, which represents over 18,000 Costco workers nationwide, and while the raise is one of the union’s demands, they and workers agree that it is not enough.

Earlier this month, 85% of Teamsters members voted to authorize a strike if negotiations didn’t meet their demands for both better benefits and pay. Now, with the collective bargaining agreement set to expire on Jan. 31, the union is making it clear that the proposed raises are not enough.

According to a post on X, formerly known as Twitter, the Teamsters account writes, “Costco reported $7.4 billion in profits last year — a 135 percent increase since 2018. So how’s the company rewarding workers? By proposing less than 3 percent raises, kicking workers just $1 in the first year of a new contract. That’s not even enough to buy a Costco hot dog.”

Others on social media shared their personal experiences working at Costco or views on the pay raise.

Costco’s DEI statement 

While some corporations, public universities, and organizations have followed political pressure to remove diversity, equity, and inclusion (DEI) initiatives, Costco is making it clear that it won’t be backing down.

In Costco’s Notice of Annual Meeting of Shareholders document, the company firmly rejected a shareholder proposal claiming DEI initiatives could lead to "illegal discrimination" against white, Asian, male, or straight employees. The Board of Directors dismissed these concerns, stating that respect and inclusion remain core to the company’s operations. 

In their response to the proposal, the board wrote, “Combined with our obedience to the law, service to our employees, members and suppliers has rewarded our shareholders. This is our code of ethics. Our focus on diversity, equity and inclusion is not, however, only for the sake of improved financial performance but to enhance our culture and the well-being of people whose lives we influence.”

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