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Costco Raising Minimum Wage to $14/Hr. Thanks to Tax Cuts


Thought companies sharing the benefits of the corporate tax cuts with their employees was over? Well, one giant U.S. company is going to be sharing their savings with their employees — on an hourly basis!

Costco announced Thursday that it will be raising its minimum wage for new hourly employees from $13/hr. to $14/hr. beginning June 11. All other hourly employees will see anywhere from a 25-cent to 50-cent increase in their pay.

According to MarketWatch:

Executives said the company was using some of its savings from last year's U.S. tax overhaul to invest in its workforce. The legislation lowered the corporate tax rate, a boon for companies like Costco with large U.S. operations.

Richard Galanti, Costco's finance chief, estimated the annual cost of the wage increases will be between $110 million and $120 million pretax. However, he said the company expects an effective tax rate of 28% this fiscal year, compared with about 35% last year.

For those that think a $1/hr. raise is the equivalent to “crumbs": if you do a little simple math, the increase is significant.

New employees that will receive the $14/hr. minimum wage — if they are full time, 40hr./wk. workers — will see a $2,080 yearly increase in pay than if they were to make $13/hr. Those are not crumbs.

Just another victory for the practice of lower taxes.

H/T: Washington Free Beacon

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