Costco announced this week that they are raising their minimum wage by $1.50 up to $13 an hour. This is the first time in nine years that they have done so. Their highest paid employees, who make around $22.50 an hour, are getting a 2.5% raise. Costco employs 205,000 people; 117,000 of which are full-time workers. They are the second-largest retailer after Walmart.
As unemployment is decreasing, retail companies are feeling the pressure to raise their minimum wage. Fourteen states have done so already. Sam’s Stores, owned by Walmart, are raising their minimum pay to $10 an hour.
Walmart says that around one million associates are getting a raise this year. They are also starting to offer their part-time and full-time workers some paid time off. It is one of the largest private pay increases ever. They are also closing 269 stores worldwide.
The Economic Policy Institute says that the key to prosperity for everyone is a living wage. Many Americans’ wages have been stuck for decades, but we are working more hours and getting more education than we were before. Raising wages would help save the government money by having fewer people needing government assistance. Since the 1990s, policymakers have expanded some poverty relief programs; they have also made these programs tied to employment. With workers’ pay stagnant, it has increased dependency on these programs.
The Congressional Budget Office (CGO) examined the possible effects of raising the federal minimum wage to $10.10 an hour. They found that it would increase workers’ pay above the poverty line. It would get 900,000 people out of poverty.
The Economic Policy Institute launched a multiyear education initiative called Raising America’s Pay. Between 2002 and 2013, paychecks remained stagnant. The average worker’s pay has only increased 7.9% between 1979 and 2013.
The Raising America’s Pay initiative is meant to raise awareness of this issue and get wage growth recognized by everyone. President Obama has signed an executive order raising the pay of federal workers to $10.10 an hour. Hopefully, this study will bring the issue up and finally increase the minimum wage to a living wage.