Important points
Costco CEO Ron Vacris announced Thursday that his average hourly wage is now $30 after the most recent raise. That’s about $5.50 more than Costco’s August retail average, according to Bureau of Labor Statistics data. High morale and low turnover are attributed to pay and internal promotion policies.
The latest data from Costco Wholesale (COST) shows the top reasons why Costco Wholesale is a great retail employer. That’s because Costco Wholesale’s wages are significantly higher than the national industry average.
During the company’s Thursday earnings call, CEO Ron Vakris said a series of wage increases, including a minimum wage of $19.50 an hour and an additional 50 cents an hour at each pay tier, will make Costco’s Average wages have reached “just north” of $30 an hour, he said.
For years, Costco has been telling the public that higher wages lead to more productive employees, which in turn leads to higher sales. Chief Financial Officer Gary Millerchip said Thursday that wages are “a critical part of providing a better experience for our members.”
Costco beats the retail average by more than $5
Warehouse retailers earn about $5.50 more per hour than the average retail wage of $24.57 per hour reported by the Bureau of Labor Statistics in August. The average retail wage was $24.02, the second lowest in BLS data. This puts the average wage for workers in the public works sector at more than $51, above the $22.18 for entertainment only.
Pay is one reason for Costco’s low employee turnover rate, as is the company’s tendency to promote from within, a point Mr. Vacris emphasized on Thursday’s conference call. He said the company promoted 95 new warehouse managers in 2024, and 85% of those promotions were people who started out as hourly workers at Costco.
The average wage across the private nonfarm sector was just under $34 in August, according to BLS data.
