A $15 Wage Hike Helps ALL Workers...
...Not Just Those at the Bottom
Costco just raised its wage scale today in response to minimum wage increases around the country, which is a reminder that minimum wage increases help ALL workers -- even those making far above the minimum wage.
Many wage earners who already make $15 per hour are foolishly AGAINST a minimum wage increase to $15 because they don't want to be paid the same as burger flippers.
That's crazy, because they are NOT currently making $15/hour. They are ACTUALLY making about $7 above the minimum wage.
That means when the minimum wage goes up, to $15, their wage will go up too, in the direction of $22 per hour (roughly).
Why is this necessarily so?
Because the lowest wage draws the least skilled, least experienced workers.
So if the current employer continues to pay $15, that employer will only be able to attract the least sought after workers. The entire wage scale necessarily will go up, as the same employers continue to pay a premium to attract the same more experienced, more reliable, more talented, and more skilled workers. (...Which is also the reason that the increases are phased in gradually -- the change is bigger than it looks.)
Today's $15/hour worker understands that the reason she is paid above minimum wage is not employer generosity -- it's because that's how much the employer has to pay to attract and keep the skills they need for the job.
In theory, all employers could somehow agree to keep all wages for all jobs at $15. But in reality, stronger businesses will always compete for better employees, and so the wage scale will naturally rise.
In other words, every wage earner benefits from a minimum wage increase, no matter their actual wage.
Costco Wholesale Corp. will lift its minimum wage for the first time in nine years, by a $1.50 an hour, as the labor market tightens and competitors start giving workers a raise.
The second-largest U.S. retailer will start paying at least $13-to-$13.50 an hour, up from $11.50-to-$12 an hour, the company said Thursday in a conference call with analysts. The increase will cut its earnings per share in the next three months by 1 cent, and by 2 cents in the following three quarters, the Issaquah, Washington-based company said.
Retailers are under pressure to boost wages as unemployment falls below 5 percent and 14 states have raised their minimum wage this year. Wal-Mart Stores Inc., which operates the Sam’s Club warehouse-style chain, a Costco competitor, lifted its pay floor to $10 an hour this year and gave an increase to more than 1 million workers...