Costco CEO Craig Jelinek Calls $15 Hourly Wage ‘Fair’ and Barely Livable

Last March, Costco CEO Craig Jelinek came out in support of a bill that would increase the federal minimum wage to $10.10 an hour. While news-making, that wasn’t a tremendous surprise. Costco has long prided itself on treating its workers well, earning itself a reputation as the anti-Wal-Mart.

The Issaquah-based retailer starts staffers at $11.50 an hour, even in states that have a far lower minimum wage than Washington’s (which rose in the new year to $9.32 an hour). Jelinek, speaking with Seattle Weekly this week, says Costco is now thinking of raising its starting salary to $12.

But would Jelinek support a minimum wage of $15-an-hour, the goal being pushed by a range of local and national activists? That’s a big jump still from Costco’s beginning wage.

Jelinek seems open to that possibility, “I think $15 is fair,” he tells SW. Indeed, he says, "$15 seems not even a living wage.”

He also says that after a year, most of his non-management staffers make close to that already. Looking at all such staff, including veteran Costco workers, the average wage is around $22.

So he says it it’s not a big stretch to meet a $15 minimum for all its workers. “We at Costco could manage it,” he says.

What he says he doesn’t know is whether small businesses could manage it. And that’s why he says he can’t fully support a $15 minimum wage without looking into the matter more.

The plight of small businesses is one of the central questions everyone will be looking at as the $15 wage movement comes to Seattle. Last month, Mayor Ed Murray convened an advisory committee of labor and business leaders to come up with recommendations for a minimum wage hike in the next four months. They will probably consider the possibility of a small business exemption, although that isn’t to everyone’s liking.

Another idea the advisory committee will likely ponder is a targeted wage hike for select industries. A model of relevance to Costco was floated last year in Washington D.C., where a bill aimed to increase the minimum wage paid by big box retailers. That bill failed after Wal-Mart kicked up a fuss.

Jelinek says he doesn’t know enough to say whether he would support a bill like that. But it’s worth taking note of his answer to a question about why, if he believes a $15 wage is fair, Costco doesn’t pay that amount on its own as an entry-level wage. He doesn’t, he says, because it wouldn’t be a “level playing field.” Coscto’s expenses would be significantly higher than competitors Wal-Mart, Target and the like.

It would seem, then, that a wage hike mandate from the city (or the state or the federal government) could actually be a good thing for a company like Costco, which seemingly wants to be generous. If everybody has to pay more, at least in a certain industry, then nobody’s at a disadvantage. Or perhaps everybody is. But they’re all in the same boat, and some companies are evidently fine with that.

comments powered by Disqus

Friends to Follow