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Profit for Costco Soars After CEO Backs Increase of Minimum Wage
The CEO of Costco, Craig Jelinek, discussed his agreement with the increase of the minimum wage in the United States last week. Since then, the profit of the company in the last quarter hit $537 million, which is an increase from $394 million for the same time last year, according to the Wall Street Journal.
“At Costco, we know that paying employees good wages makes good sense for business,” Jelinik said in a statement last week. “Instead of minimizing wages, we know it’s a lot more profitable in the long term to minimize employee turnover and maximize employee productivity, commitment and loyalty. We support efforts to increase the federal minimum wage.”
The company has come to be known for paying its employees wages well above the average in the retail industry. In 2011, an average worker at the company made $45,000, according to data from Fortune. Compared to Walmart, those workers made an average of $17,486 per year.
Costco has reported more than $10,000 in profits per employee because of the extra pay. Walmart makes $7,400 per employee, according to the Daily Beast. Costco also offers its employees health insurance, both full and part-timers. Some analysts say that the added wages are not good for shareholders, but if the profit numbers for last quarter are true, not many shareholders are going to care.