Costco’s wage decision
Various media reported Costco’s intention to increase wages for its 130,000 US staff, with a new US$14.00 per hour minimum. This will still be less than the recently increased minimum wage in Australia. Unlike Australian retailers, Costco can afford the increase for two reasons: a generally low-cost (i.e. well run) business, and the recent corporate tax reductions in the US. Furthermore, Costco’s decision has been driven by commercial reality rather than a ‘needs-based’ approach to the economy. With the US unemployment rate at 3.8%, employers must compete strongly to attract and retain talent. More proof that in a successful economy, workers are well protected by the demand for their services – without tons of regulations and government interference.