Costco might be known for giving its employees decent wages, but that hasn’t stopped it from having issues.
An increasing number of Costco employees are starting to unionize, putting pressure on the wholesaler to do something about this before the problem escalates.
Costco Is an Industry Leader With Wages
Costco has long been an industry leader in paying its employees’ wages.
The Street reports that the warehouse club is known for treating its employees fairly, and no protests were needed to get the warehouse club to pay its employees a minimum of $15 an hour in 2019.
Costco Can Afford the Extra Pay
While many businesses were struggling during the COVID-19 pandemic, Costco was thriving.
The business increased the pay of many of its employees, including the front-line worker premium, which it could afford as sales and productivity were on the rise.
Costco Has a Good Retention Rate
Costco works on the basis that its employees are rewarded well for their service, and the results speak for themselves.
In a survey by Comparably, Costco is in the top 10% of similar-sized companies in terms of its ability to retain its employees. 62% of employees feel the company is doing everything it can to ensure they stay on at the company.
Costco Drivers Are the First to Join a Union
Despite Costco’s good scores, Supermarket News reports that Costco drivers in Sumner, Washington, might not be in the 62% of happy employees.
They have voted to join Teamsters Local 174 and are the first workers at a Costco distribution center to unionize.
A Shift in Work Culture
Some reasons behind the unionization include unfair pay, retirement issues, and a lack of seniority and grievance procedures.
The benefits that once came with being a Costco employee no longer exist.
Unionization Started in December 2023
These aren’t the first Costco workers to unionize, as Costco workers in Norfolk, Virginia, went through this process in December 2023.
The Stand reports that these Costco workers became the first to win union representation in over two decades.
Teamsters Approved a National Master Agreement
Before unionizing, Teamsters approved a national master agreement for Costco employees in October 2022, which will expire in January 2025.
The contract included a wage boost, higher employer pension contributions, higher semi-annual bonuses, a flexible attendance policy, and other workplace protections and improvements.
Costco’s CEO Was Disappointed
Upon hearing that Costco employees had chosen to unionize, Costco’s CEO expressed disappointment in their decision.
However, Inc. reports this disappointment was not in their employees but in themselves. They admitted in a statement to their employees that management had failed them.
Costco CEO Makes More Money Than Employees
While it will always be expected that the CEO of a company will make more money than everyone else, Costco’s CEO earns a lot more.
However, the issue comes from former CEO Craig Jelinek earning a compensation package in 2023 of $16.8 million, which, according to Business Insider, is 336 times the average Costco employee’s annual salary.
Other Companies Tend to Respond Differently
Many noticed, including the Fast Company, how different the Costco CEO’s response to the news of their employees unionizing compared to other companies.
For example, Starbucks created a website that was anti-union, violating federal law. Trader Joe’s was even found to have threatened its employees when there were talks of unionization.
Costco Still Remains on Top
Despite some of its employees unionizing, Costco’s response shows a caring and compassionate nature that employees at other companies don’t tend to see.
Only time will tell whether Costco will take the necessary measures to treat its employees fairly and regain its pre-pandemic levels of satisfaction.
