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.