Starbucks and Costco both announced this week that they would raise employees’ wages. The announcements follow similar recent ones from big companies, including Amazon, and come amid a tight labor market and an employee shortage in the country.
Domino’s Pizza, McDonald’s, Chipotle Mexican Grill, and Popeyes’ owner Restaurant Brands International said they faced labor challenges during the third quarter, putting pressure on their U.S. sales, CNBC reported.
Starbucks said it will ensure all partners earn at least $15 per hour in the summer of 2022. In addition, effective in late January 2022, partners with two or more years of service could receive up to a 5 percent raise, and partners with five or more years could receive up to a 10 raise, according to a company news release.
Barista hourly rates will range from $15 to $23 per hour, based on market and tenure, across the country, next summer. The company is also adding recruitment specialists across the country and extending its $200 referral bonuses to help attract new talent.
For the second time this year, Costco raised its starting wage for hourly store workers in the United States, reports CNN Business. Employees were told last week that Costco would increase its minimum wage from $16 an hour to $17 starting on Monday.
This latest wage increase puts Costco – which has among the lowest turnover rates in the retail industry – $2 per hour above Amazon, Target, and other top retailers’ minimum wage, and $5 an hour above Walmart.
“These increases are part of Costco’s continuing efforts to ensure our hourly wages remain extremely competitive in the retail industry,” Costco CEO Craig Jelinek said in a memo to employees.
There is a shortage of skilled workers across the country. The National Association of Business Economics (NABE) found that nearly half – 47 percent – of respondents to its Business Conditions Survey reported a shortage of skilled workers in the third quarter.
A record-high 58 percent of respondents increased pay at their firms during the third quarter of 2021 — and nearly the same share expects to do so again in the coming months, according to the survey.
There is a struggle going on to keep the U.S. economy strong in this post-pandemic world, with the need for better wages as well as continued hiring plans on the part of business leaders. But rising business costs – for things ranging from labor to raw materials – have some economists on alert for spiking inflation trends.
