President Barack Obama wants to raise the federal minimum wage to $9 per hour. And the CEO of one of America's largest retailers says such a move would be good for workers and businesses alike. In fact, he says raise it even more.
On Tuesday, Costco CEO and President Craig Jelinek came out in support of the Fair Minimum Wage Act of 2013, which aims to raise the federal minimum wage to $10.10 per hour, then adjust it after that for inflation.
"At Costco, we know that paying employees good wages makes good sense for business," Jelinek said in a statement. "We pay a starting hourly wage of $11.50 in all states where we do business, and we are still able to keep our overhead costs low."
"An important reason for the success of Costco’s business model is the attraction and retention of great employees," Jelinek added. "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."
Costco has a reputation for paying its employees above market rate, with the typical worker earning around $45,000 in 2011, according to Fortune. Walmart-owned Sam's Club, in contrast, pays its sales associates an average of $17,486 per year, according to salary information website Glassdoor.com.
Costco also provides health insurance to a significantly larger percentage of its workers than does Walmart, the Harvard Business Review reported in 2006.
Jelinek's predecessor, Costco founder Jim Sinegal, has also expressed support for raising the federal minimum wage in the past. "The more people make, the better lives they're going to have and the better consumers they're going to be," Sinegal told the Washington Post in 2007. "It's going to provide better jobs and better wages."
Not all business leaders agree with Jelinek about the minimum wage. Subway CEO Fred Deluca, for one, told CNBC last week that raising the minimum wage is "a bad idea" that "will cause franchisees to raise prices."
About three in four Americans support raising the minimum wage, according to a recent poll.
(Hat tip: Puget Sound Business Journal.)
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