Costco raises minimum wage

Costco (NASDAQ:COST) announced it would raise the minimum wage for existing and new entry-level employees. Starting in March, the club's minimum pay will be $13 or $13.50 an hour.

This is the first raise of minimum wage for Costco employees in nine years, reported CNNMoney. Previously the rate was $11.50 or $12 an hour.

Costco employs around 205,000 people, 117,000 of whom are full-time workers.

"We think this will help, and it's important to do," Richard Galanti, Costco's CFO, said in a talk with analysts, reported CNNMoney. "We want to be the premium at all levels. ... And frankly in some markets, this is a physically challenging job. You're on your feet, you're lifting cases, you're pushing carts at these entry-level jobs. And so we thought it was time to do it."

The highest paid workers at Costco—those who are full-time and have been working there four or more years—make about $22.50 an hour. Many employees also have health benefits and pension plans.

Costco is the second-largest retailer in the country, next to Walmart (NYSE:WMT), which also announced an increase in minimum wage last year.

Walmart recently gave 1.2 million employees a raise, part of a two-step increase announced in 2015. The raises cost the company $1.5 billion this year and $1.2 billion last year.

But Costco's prospects seem positive, as the company announced it would open 30 new warehouses this year, a vast difference from Walmart's recent announcement that it would close 154 stores in the United States.

For more:
-See this CNNMoney article

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