Another major U.S. corporation has announced it will pass some of the money saved through Trump administration tax cuts on to thousands of employees.
According to The Seattle Times, Costco revealed a pay hike for hourly workers in the U.S. that includes a substantial boost to their base wage. With the starting minimum wage going up to as much as $14.50, hourly employees making more than that are set to see an increase of up to 50 cents per hour.
Chief Financial Officer Richard Galanti shared details of the plan in the company’s quarterly earnings report earlier this week, explaining that about 130,000 employees will receive the raise.
In total, he said the initiative’s pretax cost will be between $110 and $120 million annually.
Republican National Committee Chair Ronna McDaniel used the news to mock House Minority Nancy Pelosi’s description of such incentives as “crumbs.”
“Crumbs” for thousands of Costco employees!https://t.co/QuWO8Uneo0
— Ronna McDaniel (@GOPChairwoman) June 1, 2018
While beneficiaries can look forward to larger paychecks, more than a few salaried Costco employees feel slighted.
One corporate worker who requested not to be identified said it is now possible to “make a considerable amount more going back and gathering carts for the warehouse in the parking lot” than working for a salary at the same company.
As of the latest reports available, Galanti had not identified any specific benefits for Costco’s salaried employees. Earlier this year, he boasted that Costco hourly workers earn an average wage of $22.50 and enjoy generous employee benefits.
The number of employees expected to see a wage hike represents more than half of the 231,000 employees Costco reported last year. Since then, the company has announced plans to add 15 new warehouse locations to the 750 it had at the time of its 2017 annual report.
Along with a quarterly report this week that included continued market growth for the company, Galanti referenced a wider corporate sentiment regarding the reinvestment of tax savings into the workforce.
He said companies of all types have expressed “a desire to use some of this (tax windfall) to help employees, to share that wealth if you will, to drive their business.”
Galanti’s comments also came just weeks after Sr. Vice President of Human Resources and Risk Management Pat Callans indirectly jabbed competitors Walmart and Target in an internal memo referencing their media releases about bonuses and wage increases.
“At Costco, we’re not in the habit of issuing press releases about our compensation, but we have always looked for ways to pay our hourly employees well, and we’ll continue to do so,” he wrote in April. “Our annual increases to the top of our wage scales, and regular increases throughout the scale, are evidence of this.”
As The Western Journal previously reported, the number of companies of all sizes with a public commitment to invest tax savings into their employees had topped 250 by the end of January.
Among the major corporations to announce such bonuses early this year were Starbucks, Disney and Home Depot.
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