Rejecting industry dogma, Costco backs calls to lift minimum wage

I like Costco, I think we should raise the minimum wage, and I am a reliable Democratic voter, which is one of the reasons I know that Costco is a key corporate supporter of the Democratic party, and that the minimum wage is a Democratic party identity issue.<p>Agree also with the other comment here that the minimum wage is a structural advantage for Costco against Walmart.

This doesn't surprise me at all. Since they already pay their workers a lot more than minimum wage, the increase would mainly be a hit to their primary competitor that relies on low wages: Walmart/Sam's Club.

Whenever I hear people talking about the minimum wage I want to know why they don't talk about the earned income tax credit instead.<p>EITC: Money is given to the poor people that need it most. The money that goes to them comes out of progressive taxation. Very little dis-employment effect.<p>Minimum wage: Money mostly comes from higher prices, which fall disproportionately on poor people. Fairly substantial dis-employment effect.<p>The only reason to favor the later is that politicians can rely on the public not noticing that they're paying for it.

The most utterly evil profit maximizing business would always prefer that the government mandated minimum wage is somewhere near what they pay their lowest paid employees.<p>Sad state of journalism that a group of businesses lobbying for their self interest is swallowed so frequently as selfless action for the public good.

Costco is free to pay their employees as high of wages as they'd like, no legislation required. This lobbying isn't out of their good will but a strategic play to hurt competitors that rely on lower wages. Such is politics.

The more time goes on, the more I think maybe a minimum guaranteed income is the solution that makes the most sense. Maybe we should just accept that there isn't going to be enough work for everyone, and that that's going to become <i>more</i> true in the future, not less. And furthermore, maybe we should accept that that's a <i>good</i> thing, as long as we shape our economy accordingly.

<i>&#62;And why Costco, a public company that has investors watching every penny and questioning every management decision?</i><p>I guess the author doesn't know that Costco is one of the few companies out there who famously give the middle finger to Wall Street analysts (who want them to reduce wages and benefits, and increase the price of goods sold)

This is a dangerous statement; but I know that raising the minimum wage doesn't really hurt people making six figures; but, doesn't it hurt people making only a small multiplier of minimum wage? Like people making 1.25x minimum, and 1.5x minimum, because they'll now be making 1.05x and 1.15x minimum wage, reducing their own personal buying power once the prices settle again..?<p>I'm all for people earning more functional income. I've said before that I hate the corporate-level, money-hungry models of wages; but I had been taught that increasing the minimum wage, though it helps for a short while, ends up hurting in the end

The labor market is governed by the law of supply and demand, just like any other. If you arbitrarily increase the price of something, in this case low-skilled labor, surpluses are the result.<p>If you want to help people, find a way that doesn't destroy the incentives to hire them and the incentives to become a more valuable employee.

This makes complete sense:<p>1) Costco already pays much more than the minimum wage, so they would not be affected directly from a cost perspective.<p>2) Competitors do not necessarily pay more than minimum wage, so this can only increase the costs of competitors.<p>3) Increasing minimum wage gives income to the lowest income people who will spend all of this money and are likely value shoppers of the kind attracted to big box stores like Costco.<p>There is nothing for Costco to lose here.<p>While I admire Costcos ethics all around, I can't say this is an entirely selfless gesture. Costco behaves rationally good with a long term view rather than irrationally bad with a short term view.

They want a wage of $10.10 per hour? I bet a Costco employee starts around $10.20 per hour.

Blogspam. Original is here: <a href="http://www.latimes.com/business/money/la-fi-mo-costco-wages-20130306,0,7790766.story" rel="nofollow">http://www.latimes.com/business/money/la-fi-mo-costco-wages-...</a>

I'm pretty sure that increasing the cost of labor will drive the prices of labor dependent goods and services up, while also probably flattening growth or decreasing employment numbers when employers try to maximize the margins on the labor they already employ.

Large, established retailers, in general, will favour a higher minimum wage if it's enforced on themselves and all their competitors. It's actually good for them, since they operate at a scale that can do more with less people. Unfortunately it reduces the market to a combination of large retailers, and small family run operations which can effectively get members of their family to work for less than the minimum wage, and very little in between.

just another story of a business getting involved in public policy in order to hurt competitors. costco can (and already does) pay workers more than minimum wage as is in line with their operating philosophy. government shouldn't be in the business of regulating wages, that's an agreement between an employer and employee.

Here is a plan - set the minimum wage at a level where one person working full time will not have to collect any state benefits in order to raise their family.<p>Any other level, is an indirect but tangible subsidy to companies who employ minimum wage staff

A bit of statistics about minimum wage workers <a href="http://www.bls.gov/cps/minwage2011.htm" rel="nofollow">http://www.bls.gov/cps/minwage2011.htm</a>

I support a minimum wage increase (trickle-down economics is moronic and makes much less sense than a bottom-up approach, but I digress), but let's not forget that a minimum wage increase helps Costco's bottom line, since their biggest competitor's business model is completely tied to low wages. Just saying let's not pretend this is as righteous of a move as it would be if it were coming from Wal-Mart (who stands to lose). :P

It makes sense for Costco, because they pay above minimum wage anyway, and any increase in the minimum wage will hurt their competitors more than them.

Costco employees start higher than minimum wage already, so this won't affect them. But it's in Costco's interest for their competitors to have higher labor costs. So, Costco supports minimum wage increases.<p>Labor unions do the same thing.

Costco is supporting the rise in minimum wage only because it helps them. They have lower labor cost then their competitors. I can hardly see any employees in Costco warehouses. This is the same type of hypocrisy as them supporting higher taxes for the rich and then getting a huge loan to pay ahead of schedule bonuses for the execs and board members to avoid new tax rates.

It probably hurt small independent shops much more than it would hurt Costco, due to economies of scale - if you have 100 workers and you had to raise wages 10%, you probably could do the same with 90 workers or cut a little service here and there without too much effect, but if you have just one worker and you don't have enough money for 10% raise, you're toast.

Raising the minimum wage will increase unemployment. Additionally, having any minimum wage at all increases unemployment. On top of the unemployment problem, a minimum wage is an intrusion into the rights of the individual to voluntarily enter into business with others.

I'd much preferred if they removed minimum wage and almost all of the welfare programs and replaced it with basic income guarantee (<a href="http://en.wikipedia.org/wiki/Basic_income_guarantee" rel="nofollow">http://en.wikipedia.org/wiki/Basic_income_guarantee</a>)

This is terrible. Costco can get away with a higher minimum wage because they sell at a higher end. All this is doing is forcing Walmart to stop competing at the lower end of the spectrum of goods. The only people harmed by that are the poor.

The minimum wage is as perfect a litmus test as we have for separating those who think they understand basic economics from those who actually do.

Higher labour costs just push business overseas. Is this not true?

"especially at a time when finances are stable at best"<p>Sloppy reporting. Here's what the author should have written:<p>&#62; Just four years after the worst shock to the economy since the Great Depression, U.S. corporate profits are stronger than ever.<p>&#62; In the third quarter, corporate earnings were $1.75 trillion, up 18.6% from a year ago, according to last week'si gross domestic product report. That took after-tax profits to their greatest percentage of GDP in history.<p>&#62; But the record profits come at the same time that workers' wages have fallen to their lowest-ever share of GDP.<p><a href="http://money.cnn.com/2012/12/03/news/economy/record-corporate-profits/index.html" rel="nofollow">http://money.cnn.com/2012/12/03/news/economy/record-corporat...</a><p>Whoever gets the mouthpiece gets to frame the debate.<p>The debate is wrong.<p>What's happening is this: Corporations have people on the hook, because the people are poor &#38; desperate, meanwhile the corporations are more flush with cash than ever before. They know that everyone is running around, pretending we're in a terrible financial crisis… because we are, if you're an individual. The profit-taking is immense and ordinary people are suffering.<p>This is not a debate about "Well gee can Joe-Bob really produce $8 of value an hour?" because the profits say yes, Joe-Bob is definitely producing much more value than he costs. Even more so, given that this is a time when CEO compensation (a cost that reduces profit) has skyrocketed, compared to the average worker's wage.<p>Good for Costco. They have always behaved well towards workers, with regards to pay and benefits, even when things really <i>were</i> bad.