Costco is increasing wages, exceeding $30 an hour for many employees, as the company nears the deadline to finalize a new contract with its unionized workforce.
The International Brotherhood of Teamsters, representing approximately 18,000 Costco employees—about 8% of the retailer's U.S. workforce—faces a collective bargaining contract set to expire at the end of Friday. Union members have already authorized a strike if negotiations do not result in an agreement.
Meanwhile, Costco CEO Ron Vachris has announced wage increases for nonunionized employees over the next three years, according to an internal memo obtained by NPR.
Starting in March, hourly wages for store clerks and assistants at the top of the pay scale will increase by $1 to $30.20 per hour, with an additional $1 raise each year thereafter. Entry-level workers will see a 50-cent increase, bringing their wages to $20 an hour.
According to Costco Teamsters spokesperson Matthew McQuaid, the company's decision to raise wages is a direct result of union pressure. The Teamsters represent Costco employees 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, according to NPR.
The Teamsters' contract with Costco is set to expire at midnight on Friday, with workers advocating for higher wages and improved benefits, arguing that they deserve a share of the company's record financial success.
The retailer, which ranks as the world's third-largest by revenue, trails only Walmart and Amazon.
