The Real Reason Costco May Have An Employee Crisis On Its Hands
Over the past few years, Americans have seen many changes in employment and inflation may have forced some workers to be more proactive in seeking a living wage from their employers. According to CNN, Costco raised its minimum wage for hourly workers to $17 in October 2021 and the chain has one of the lowest turnover rates in the retail industry. In the US, the company employs a total of 195,000 full- and part-time employees (via Costco). Unfortunately, many benefits of wage gains were leveled out with inflation (via Brookings University).
Out of Costco's 13,000 ratings on the workplace review website Glassdoor, 80% recommended the retail company as a good place to work. Even though it ranked 93 out of 100 among the site's Best Places to Work in 2022 (via Glassdoor), it still received a 4.2-star rating out of 5 stars. One worker wrote, "Very affordable high-quality health insurance benefits even for PT employees." In addition, employees get paid time off if they've been employed for more than a year, free Costco memberships, and the more unusual perk of a free Thanksgiving turkey (via Rather Be Shopping).
Costco itself is doing well despite inflation, with a 16.4% increase in net sales this year as of July 2022 (per Supermarket News). However, workers are not happy with the current contract offering from the retail giant.
Costco is in the hands of workers
Teamsters Union, the largest labor union in the country, has been negotiating a new contract with Costco. After negotiations and what was labeled as the company's "last, final, and best offer" in June, of the 28% of Costco Teamsters who voted, 93% rejected the proposal (per The Street and World Socialist Web Site). The contract offered a 4% increase in overall wages over three years, however, with inflation reaching almost 9%, the union said the company is "refusing to share their success" with employees (per PR Newswire).
As a result of the rejected contract, the Teamsters are warning of a nationwide strike, something that could have a severe impact on Costco. "Our members at Costco will stand up for their rights and withhold their labor if necessary," said Sean O'Brien, Teamsters general president (via The Street). Tom Erickson, international vice president and director of the Teamsters Warehouse Division, added, "This isn't a bluff."
According to World Socialist Web Site, Costco employees have not gone on strike since the 1970s. In 2016, Costco avoided a potential strike after employees rejected an offer by the company, but an agreement was reached about a month later. Workers and surely, customers, are hoping another deal can be reached to achieve a similar outcome.