Starbucks and Costco raising wages in the nationwide competition for workers

28October 2021

A recruitment sign hangs at Starbucks in Los Angeles.

Mario Tama/Getty Images

Mario Tama/Getty Images

Costco has raised its minimum wage to $17 an hour, and Starbucks will raise its starting pay to $15 an hour. They join a growing list of chains that have added new incentives, trying to keep their workers in a year of mass resignations and stepped-up labor organizing.

Starbucks is planning some raises in January, but its minimum-pay increase will kick in next summer, when baristas will earn between $15 and $23 an hour. The coffee giant had committed to raising its hourly minimum to $15 back in December, when it said about a third of its retail staff already earned that much.

Costco has reportedly already raised its starting pay to $17 an hour earlier this week. That comes only a few months after the company made the jump to $16 an hour in February — at the time propelling it ahead most competitors. Costco CEO at the time said the majority of hourly workers already earned above $25.

Restaurants and stores have been facing an unprecedented labor crunch. As of August, retailers had 1.2 million unfilled jobs, while restaurants and hotels had 1.5 million. Workers have been quitting at record levels, often citing low wages, which are now rising for the first time after decades of stagnation.

Walmart, which employs 1.6 million U.S. workers, last month raised hourly pay by $1 for over half a million employees. That brought Walmart’s average hourly pay to $16.40, though its minimum wage remains $12 an hour.

Amazon, whose U.S. workforce neared 1 million people as of September, starts its pay at $15 an hour. As it has rushed to recruit and staff up, the company has offered new employees as much as $22.50 an hour and in some locations, a sign-on bonus of up to $3,000.

Like Amazon, Target and Best Buy start wages at $15 an hour. Target is paying a $2 bonus for peak holiday work. Chipotle in May boosted its pay to range between $11 and $18 an hour. CVS recently said it would reach $15-an-hour minimum by mid-2022, though most of its employees already make that. Walgreens began phasing in the $15 minimum wage this month.

Starbucks is facing a push to form the first union at its corporate stores in the U.S. Workers at three locations in Buffalo, N.Y., have petitioned federal labor officials for a union vote. They say they want more staffing, training and pay, among other things.

The coffee chain’s announcement this week noted that the company is working on “a complete redesign” of its training guide, a new scheduling app and other shift changes. The company has said it supports the workers’ right to organize but that a union was unnecessary.

Starbucks is also paying $200 as a referral bonus to attract new workers and plans raises for its existing staff in January: up to 5% for those employed over two years and and up to 10% for those employed over five years.

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