Monday, February 16, 2015

Costco and the $20.89 an Hour Job Myth

President Barack Obama loves Costco.  Why?  Well, it doesn't hurt that Costco founder Jim Sinegal has given and raised hundreds of thousands of dollars for the President's two campaigns and lobbied for Obama initiatives like a higher minimum wage and the Affordable Care Act.  In return, President Obama brags about Costco fulfilling its corporate responsibilities, including the claim that it pays its hourly employees $20.89 an hour on average.  Meanwhile, Wal-Mart (and companies like the retail giant) are demonized for paying its employees only an average of $12.67 an hour.  This "fact" has been touted in ABCNews and Bloomberg Business.  But is it true? 

The underlying motivation behind these comparisons is a belief that employers can simply pay employees more if they are motivated to do so.  Sometimes it comes accompanied with an argument that it is actually good business to increase employee pay far above the market rate.  (Apparently we're supposed to believe that people unconnected to a business actually know better what is good for the business than the owners of that business.)  Often the Costco v. Walmart comparison is made in conjunction with a plea for an increase in the minimum wage.

Is the Costco claim true?  Well, the great thing about the Internet is it allows the independent gathering of information that might not have previously been available. Glassdoor is a website at which employees can report their pay.  (You may have to enter your email and answer some questions to get beyond the first page of employee positions.  But even if you're not so inclined the first page contains a plethora of information.)  Let's look at the Glassdoor reported hourly pay for some Costco jobs:

Cashier Assistant (Front End):  $12.74
Front End Assistant:  $12.65
Stocker $13.73
Sales Assistant  $12.92
Food Service Assistant $13.75
Food Court $12.59
Merchandiser $14.28
Night Stocker $12.10
Baker Wrapper $11.79
Front End $11.87
Merchandiser  $12.30

Then how does Costco get to $20.89 an hour for its hourly employees?  Take a look at the supervisors and skilled positions who are identified as hourly:

Operations Supervisor $23.56
Front End Supervisor $23,42
Licensed Optician  $25.39
Hearing Aid Dispenser  $26.63
Inventory Auditor $20.87
Assistant Manager $27.19
Meat Supervisor $25.18
Merchandiser Supervisor $23.51
Analyst $25.54

The trouble with arriving at $20.89 as the average pay of hourly Costco workers is that there are a lot more employees at the lower end of the hourly pay scale than the supervisors and skilled and semi-skilled workers at the other end.   So the average wouldn't be close to $20.89.  How then to get it to $20.89?  Instead of averaging all the hourly employees pay, average all the hourly positions.  So even though there might be 20 stockers for every 1 hourly supervisor, their treated as 1 to 1 when calculating the average this way   The distinction, which would have a major effect in skewing Costco's hourly pay upward, would be lost on the reporting that followed.  Costco would be hailed as a hero while its competitor Wal-Mart is demonized.   A brilliant PR move.

Wal-Mart's reportedly pays its hourly workers an average of $12.67 an hour. Where did that figure come from?   It was contained in a letter Wal-Mart sent to consumer activist Ralph Nader responding to a question regarding the average wage for its full time employees.  Wal-Mart might have simply added up its full time employees pay and provided an average, instead of an average of positions which is really the only way to explain the Costco calculation.

I don't think there is any question that Costco pays its lower level employees a few more dollars per hour than Wal-Mart does and it is smart to do so in order to retain employees and keep them happy.  But $8 an hour better?  Don't be ridiculous.


Anonymous said...

This is an excellent analysis of the Costco Lie. Thank you for the research, Paul.

The fact that "Costco founder Jim Sinegal has given and raised hundreds of thousands of dollars for the President's two campaigns and lobbied for Obama initiatives like a higher minimum wage and the Affordable Care Act" motivated me to drop my Costco "membership" years ago.

Just as I try my best to buy products made in America- almost impossible since Bill Clinton's NAFTA shipped American jobs out of the country as the much-mocked Ross Perot warned it would- I do my best to avoid any business concern that raises money for socialist Marxists like Obama.

Anonymous said...

You nailed it, Mr. Ogden! Do you think if we dove into the numbers published by companies pillaging our tax dollars through the IEDC, we'd find the same fuzzy math?

Anonymous said...

I believe that many of the rates you are quoting for Costco's hourly employees are the starting wages? There are automatic raises that kick in as employees accrue a certain number of hours. A full-time cashier at Costco, for instance, who has topped out (which usually takes about 2 years) is making more than $20 an hour. Plus, there is time and a half on Sundays as well as twice-yearly bonuses.

Paul K. Ogden said...

Anon 11:43, I think that website is just posting raw data that employees self-report. There is probably a mixture of new employees and more experienced employees. So if a person titles a job as Front End Cashier-Assistant this is reported separately from Assistant Front End Cashier. They list how many jobs are self-reporting with that particular title. My guess is they average the wage for each identical job description.

I talked to an attorney yesterday who had represented a person in a non-employment law matter. The person's job just happened to be at Costco. The person had worked there a couple years and was making like $11 or $12 an hour.

On some of the stories about Costco's $20 plus an hour wages you will see comments from Costco employees saying their salaries are nowhere near $20. One employee said you have to work for about 8 years plus to get pay increases that get you up to $20 an hour.

Not sure of the bonus situation. I don't think there is any question Costco pays better than places like Wal-Mart. It's just their generous $20.89 average hourly wage is undoubtedly grossly exaggerated.

TM Lutas said...

I called up Sam's Club from the same website and found something quite interesting. Assistant manager is a salaried position there, hourly at Costco. If salaried employees are excluded, are we really getting an apples to apples comparison?

Anonymous said...

I work at Costco.
Here is the thing you are not taking into account. Costco has a pay scale that starts at $11.50 for hourly assistants (cart pushers, cashier assistants, stockers, ect.) and goes up to $23.50 for clerks (cashiers, fork lift drivers, ect) the Highest rung on their hourly workers is the Supervisors which make $24.50 an hour On top of that all part time and full time employees get full benefits. Your get raises automatically based on total number of hours worked and begin getting bonuses twice a year at about 5-8 years depending on total hours worked. Every year you get a Cost of Living adjustment to your salary in addition to your standard raises. It does take between 5-8 years to top out your salary.

@TM Lutas, the Assistant manager position is salaried, as are all management positions. If someone is a manager they will be receiving salary, the only exception is temporary managers who are covering the leave of absence of the permanent manager.

At the end of the day I do not know a single other company that is paying a cashier $49k a year, and at the building I work at about half the cashiers are topped out with most of the rest close behind.

Paul K. Ogden said...

The claim is $20.89 an hour, average, for hourly workers at Costco. Yet at Glassdoor, nobody is reporting their pay as being anywhere near that, except for supervisor and people who are in skilled positions. Plus salaried people aren't counted. I assume you're not claiming that cashiers are making $49,000 a year. No Costco worker has reported that type of pay at Glassdoor. If they did every low skilled employee would be trying to work there. I know people who work at Costco and they scoff at the $20.89 an hour AVERAGE claim. Costco does pay better than Wal-Mart and good for them. But let's not make absurd claims about pay, in a transparent attempt to say companies could pay more if they wanted to. It's all about supply and demand.

If the pay is as you say, then Costco people need to get on Glassdoor and contradict those thousands of Costco employees who all report their salaries as being well below $20 an hour.

Anonymous said...

I work at Costco as sales audit and payroll floater and start the same as a cashier 12.00 per hour. I top out at over 23 per hour in a few years with 9 paid holidays 9 sick days and a week vacation time per year worked up until the 5 week max. So a low skilled cashier after 5 years will make 50k+ per year paid holidays 5k a year bonus tons of vacation holiday and sick time and really affordable insurance (dental thru Costco is half what my husband's work gives and he has a college degree). A supervisors pay is only $1 extra and managers are salaried. It does sound unbelievable but it is true. Costco is wonderful company that pays very well

Paul K. Ogden said...
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Paul K. Ogden said...

Anon 9:26, the claim is nearly $21 an hour for hourly employees at Costco. If unskilled Costco employees are truly making pay that averages $50,000 per year why is no one among the thousands who have reported their Costco pay reporting that type of pay on The only people that get $21 an hour at Costco according to Glassdoor are supervisors and skilled employees.

Anonymous said...


Check the pay range on - it lists the salary for a cashier ranging from $10-$23 per hour; the average is $16.04.

Lots of people, regardless of profession, don't report their salary one either, or

You just seem to be very obstinate and stubborn in your opinion that unskilled Costco employees make $20 per hour. If you don't believe anyone here, go ask Costco employees yourself.

Paul K. Ogden said...

Anon 12:55, did you see the other part of the page where assistant cashiers and other front end assistants are reporting pay in the $12 an hour range? Remember Costco's claim is that the pay of hourly, not salaried people like supervisors or skilled employees, is on average $20.89.

So you think the sample of hourly Costco employee pay on is so incredibly skewed that it's reporting pay $4 to $8 below what Costco actually pays? So there are unskilled people walking around making $25 to $30 an hour to bring that average up, to make up for those $12 an hour employees. There is zero support for that claim.

And I have talked to Costco unskilled workers, including ones that have worked there for some time. They are getting paid nowhere near $20.89 an hour.

Anonymous said...

Walmart has 1.6 million employees, costco has 166000.

Does costco pay more? Yup...and the stores are chronically understaffed. So yes i made thirteen an hour but they run on such a skeleton crew you're doing the jobs of two if not three people.

So you're getting thitteen while doing thirty five an hour worth of work.


Anonymous said...

How many people receive government assistance because they work at Costco?
Walmart is ok with being a drain on society. A lot of Walmart workers don't make enough to support their families and require help from the government.
You can not say the same about costco.

Robert M said...

Hey buddy you obviously don't know anything about Costco and believe everything you read online. The majority of Costco employees are tenured employees hence the high pay average. There is a pay scale that everyone starts at depending on your specific job title. In most buildings about 65% of the employees are topped out! Meaning they make the maximum amount for their specific position. Most of which is $21-$25 per hour do the math.

Robert M said...

Everyone of my forklift drivers make 22.50 an hour. Please stop talking out of your anus!

Paul K. Ogden said...
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Paul K. Ogden said...

Sorry, Robert W., but Glassdoor is a self-reporting website. So you mean to tell me that all those thousands of hourly employees reporting far less than $20.89 an hour are simply lying? I know plenty of people who work at Costco and have for years. None make anywhere near $20.89 an hour.

Fork lift drivers are skilled employees who have to be trained and certified. Skilled employees at Costco do report pay of $20.89 and above. But the notion that stockers and cashiers at Costco are making $20.89 an hour on average is a bunch of hogwash.

Remember the claim is that HOURLY Costco workers are on average making $20.89 an hour. The claim is not confined to those who have a little or a lot of experience. Only that they be paid on an hourly basis as opposed to salaried.

The Costco $20.89 claim is just like the Container Store pay claim. Pure liberal fiction made up to try to make it sound like retailers can always pay unskilled workers more...if they just want to.

Show me some proof that Costco hourly employees, both experienced and inexperienced, make $20.89 on average. You don't have any proof except the naked assertion of the Costco CEO who happens to be a big Obama contributor. Of course, it was Obama who promoted the Costco $20.89 an hour myth.

SirCharles31 said...


You seem to be under some sort of misapprehension about how Costco's payscale works. Costco's payscale is based purely off hours worked and moves inevitably and inexorably from $11.50 per hour to the top rung which as WORST is $20.00 an hour plus. So yes, I am telling you that unskilled cashiers assistants can and are making $20.00 per hour and more with full benefits, $5,000 a year bonus and best in class health insurance. This is a fact.

Does it take 5 years of full time work to top out? Yes. Does any other retailer offer anywhere NEAR that level of upwardly trending pay? No even close.

It sickens me that a company finally takes the time, effort, and money to pay it's employees a real living wage and treat them with respect and people like you want to spread misinformation to support some sort of asinine political agenda.

You can either stick your head in the sand and plug your ears, or you can admit that you didn't perform your due diligence in researching this article.

Anonymous said...

I left Costco in 2000 at a pay rate of 16.83 an hour with full benefits,two bonus checks of approximately 2500-, undeserved, Sunday pay of 1.6 of hourly and a miserable job. I was employed with the company for 16 years with regret. 50k a year is considered a good paying job to those that are employed at Costco, but they know nothing else. I never looked back. The employees are no more skilled than Target employees, yet carry themselves in an arrogant manner due to their pay rate. I am glad to have left.

Paul K. Ogden said...

SirCharles, by your own admission Costco workers start at $11.50 an hour and don't get to $20.for five years. Pray tell, then how does the claim that those hourly workers on average make $20.89 hold up? It doesn't. You don't have an answer for why Costco employees don't self report pay anywhere near an average of $20.88 an hour. In fact your comment about pay actually confirms that the $20.8 claim is nothing more than a liberal myth.

Anonymous said...

Paul K. Ogden. I have no answer for you as to why people are self reporting a lower pay scale. Nobody can answer this for you. What we can answer is the facts of how Costco pay works. I have been working for Costco for almost four years. I make 14.50 at the moment. I am a Cashier Assistant. I am not a "skilled" worker as you like to call the fork lifters. I am TELLING you, when I top out I will be making $20 an hour. It might take me two more years but I will top out at $20. Costco pays employees well. It doesn't matter whether you work in bakery, deli, food court, front end. Costco sees all employees as valuable. Yes, supervisor and cashiers do make a little more when they top out but not by much. I believe a cashier makes $1.50 more than a cashier assistant.

So a cashier assistant tops out at $20 while a cashier tops out at $21.50. So stop changing the subject and asking "why Costco employees don't self report pay anywhere near an average of $20.88 an hour" who knows! We can't answer that for you. But we are Costco employees and we are telling you that after accruing hours we do end up making $20 or more. As for the Costco employees you keep on asking and they say they make less than $20 that's because they haven't top out. Go into a Costco and ask a cashier how much they will make if they are top out and they will tell you its more than $20. Ask a cashier assistant how much they will make if they top out and they will say $20. I am a cashier assistant and I am telling you I make $14.50. When I top out I will make $20.


Paul K. Ogden said...
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Paul K. Ogden said...

Anon 12:18,

Do you not understand what an "average" is? The claim is NOT that Costco employees "top out" at $20 an hour. The claim is that Costco pays its hourly employees an average of $20.89 an hour.

Average is defined as "a number expressing the central or typical value in a set of data, in particular the mode, median, or (most commonly) the mean, which is calculated by dividing the sum of the values in the set by their number."

Your own explanation of employees "topping out" at $20 an hour after a several years means by definition Costco is not paying an AVERAGE of $20.89 an hour. You've been working there for four years and only make $14.50 an hour, more than $6 below the claimed average!

Anonymous said...

Why does everyone have to go onto to contradict their numbers??? The fact is there are a lot that go into that $20.89 claim. Go into a warehouse and look at peoples badges and you will see that most Costco employees have been there for quite some time. So as hours worked pay is increased and sooner or later they are getting their bonuses twice a year. When someone quits or gets fired, their response is naturally going to be , I only made $14 an hour there, not including all the holidays they were paid for that other companies don't do or the time and a half they get paid for when working on Sundays. When I worked for Target for 5 years I was getting annual raises of about 35 cents and vacation/personal time was a joke. Costco at 5 years I am receiving 3 weeks vacation and 1 week personal - because of hours worked I will start to receive my bonus check in about 6 months, have excellent and cheap health and dental, make (18.50 on paycheck) hour, get paid time and a half on Sundays, get major holidays paid and off, closed Thanksgiving all day, 401k partial matching, and many more personal incentives offered to employees. Do the employees stating their salary on factor in any of these like Costco does with their $20.89 claim!!!! And I already know you are going to say that you are just looking at hourly pay and not other benefits, but you need to realize that the 20.89 has other factors in it not just the hourly pay. So instead of just looking at that basic hourly pay, why don't you do your research and look what in includes-Costco has nothing to hide. For I know it includes some of those other factors from information I read from them.

Paul K. Ogden said...
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Paul K. Ogden said...

Anon 2:51, so you think those thousands of Costco employees self-reporting their pay on are all lying former employees of Costco bitter about their termination? And the current employees are just too busy to report their pay on the website? Really?

The claim is an AVERAGE of $20.89 an hour. A previous comment from a Costco employee indicated that he/she has been employed for four years and makes $14.50 an hour. You say that you have worked 5 years and only make $18.50 an hour. You all have a lot of experience and you're not even at the $20.89 claimed rate. And you think the AVERAGE is $20.89?

Sorry to burst your bubble, but the claim is an AVERAGE of $20.89 an hour sans benefits. You want to add in benefits. (Even the best benefit package generally only adds a few dollars an hour to the average.) You claim a lack of research, but I actually did research and provided it. You did NONE. You want us to take the naked claim of a CEO, who has an incentive to lie to build up good will with the public, instead of the claims of thousands of employees who actually are getting the hourly pay the Costco CEO talks about. There is nothing whatsoever to support his claim.

Why can't we applaud Costco for paying higher hourly pay than most comparable employers without making up fictitious numbers? Here is why. Liberals want to promote the Costco myth to send the false message that employers can pay employees more, without any consequences to their business, if they simply want to do so. Poppycock.

Anonymous said...

Sad, that you refuse to listen to actual employees.

Paul K. Ogden said...

Anon 12:07,

There are literally thousands of Costco employees who post their pay on So do you think they all have a grudge against the company? The hourly pay they report is nowhere near $20.89 an hour, which is the Costco CEO's claim. Likewise I've talked to numerous Costco employees. They all laugh at the assertion the company pays an average of $20.89. Even the (supposed) Costco employees who have come to my sight to try to defend the claim, report numbers that undermine the claim. One person said he/she was employed for 4 years and is earning $14.50 an hour. I can only believe that person does not understand what the word "average" is. In order to get to a $20.89 average when you're paying four year employees $14.50 an hour, you have to have more seasoned employees (and there would be a lot fewer of them) w$30 an hour plus. Maybe there are very experienced hourly Costco employees making $20.89. But that doesn't get you to an AVERAGE. Do you not get that?

Some have tried to refashion the Costco CEO's claim - that it includes benefits. Well that not that he said, but even generous benefit packages only add a few dollars per hour. Undoubtedly Costco pays better than Wal-Mart, Sears and Costco. They just don't pay employees nearly $8, $9, or $10 more. Try maybe $3 more.

The Costco CEO offered absolutely no support for his claim. And he has a huge incentive to fib - to build up goodwill for his store. And it's worked, primarily for a lot of naïve liberals who think CEOs can pay middle-class wages for unskilled work...if they just want to.

This post is over 10 months old. I'm not going to keep monitoring comments. I'm going to write again on the subject and the Costco defenders (who have yet to offer any actual proof) can make more comments.

Jason Golden said...

Paul, you seriously have no clue what you are talking about. I am a Costco employee with a bachelors degree and can tell you top pay is over $20 an hour for hourly. They also include the bonus (up to $8000.) and Sunday time and a half in the numbers when they come up with the average salary. This is not something anyone takes the time to put on glassdoor. They reason all of the glassdoor salaries are low is because they make you report your salary to keep reading other salaries. Most of the people who are looking at the salaries are new employees trying to see what they might make in the future.

Paul K. Ogden said...
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Paul K. Ogden said...


Wow, so many people who don't understand basic math. You say the "top pay [at Costco} is over $20 an hour for hourly." Once again, an alleged Costco employee proving my point...just like the person who worked there 4 years and was only making $14.50 an hour. The claim is that $20.89 is the AVERAGE pay not that it's the TOP pay! Do you not understand the concept of an "average?"

What you say about Glassdoor is not correct. I haven't reported my pay on their yet I can read what other people post on jobs. But even it were correct, you provide no explanation as to why thousands of people have decided to lie, grossly understating their pay at Costco. Or they "just don't have time" to accurately report their pay according to you. Seriously? That's your answer for why the pay on Glassdoor is so low?

I've talked to plenty of Costco employees in person. Not a single one of them back up the $20.89 AVERAGE pay claim. Look at the comments in articles where the $20.89 Costco pay myth is discussed. Plenty of self-identified Costco employees employees disputing the $20.89 claim.

There is nothing to back up the $20.89 an hour claim except the self-serving statement of the Costco CEO who has an incentive to court gullible people thinking his company is somehow different than all the retail establishments out there. And it is offers a few more dollars on hour in pay than a Wal-Mart and other retail establishments. It's just the AVERAGE is nowhere near $20.89.

Anonymous said...

I have worked at Costco for five years now. I make just over 15$ an hour. I also drive a forklift in the evening, so I get an extra .25 an hour for the last two hours of my shift. I have decent benefits, that are great when you are first starting out at Costco in a part-time capacity and have a wife and children to take care of. I also have a fair amount of vacation and sick time, also handy with kids, though I manage to burn through it more quickly than I earn it. Kids get sick after all. Also, there is a limit throughout the year as to how many times you can use your sick time, regardless of how many times you need to use it to take care of your kids. I have been written up in the past and threatened with suspensions, what ever, my kids are sick I'm going to take care of them. As far as the raises and bonuses go, those are measured strictly through hours worked and have nothing at all to do with work ethic (which in my personal opinion breeds lazy, overpaid employees). So, regardless of how hard I work, at this time I have over 700 hours before my next raise. Since it's January which begins the slow season, Costco slashes its hours regardless of the needs of its employees, I'm getting between 24 and 28 hours a week right now. I have another 1700+ hours until I will receive my first bonus check. 1700 hours at 24 hours a week...
As far as a cost of living adjustment is concerned, I have never heard of that taking place, and I have never received any such thing within my 5 years of employment. I am however pressured to donate a portion of my pay check towards the employee club and united way 1-2 times a year, regardless of the fact my family already donates time and makes donations towards other charities of our choosing, but my personal charity isn't reflected in Costcos numbers, so they really appreciate it when we as employees can help out. Numbers, that's what I believe it comes down to at Costco. Big numbers, which they have. They have a lot of employees, many of which like working there, because they're skill sets and poor work ethics would never allow them the opportunity to slowly slug their way to 20+ an hour anywhere else. Is Costco a bad company to work for? No, I've worked for worse. However, I've also worked for much, much better. Companies that wanted you to succeed as an individual, companies that gave you the tools and guidance to do so. That's what gets to me, so many people talk as if Costco is one of the best companies out there. It's just another corporate conglomerate that's trying to make money. It's not trying to better the world or be the best company to work for if you have a strong work ethic and vision. Am I going to quit anytime soon? No, I need the money, I need the benefits... at least until I manage to get through school. Then I will leave. So, if you just got out of high school or recently dropped out of college and have no real drive to succeed at life and just want to skim buy for the next 20+years, yes... Costco is probably a pretty good fit for you. However, if you want more out of life than just some 20$ an hour carrot being waved around in your face, you may want to take into consideration the possibility that the "Costco is the best retail place to work" perception may be more of an Urban Legend than fact. Anyways, like Costco, don't like Costco... It's a multi-billion dollar, international company that opens up plenty of new stores all over the world every year... It's not going any where or changing it's business practices anytime soon.

Norm said...

I work at Costco as well. I have been working there for 10 years in February. Prior to Costco I worked an average of 2 to 3 jobs at a time for $8 to $13 an hour. My current pay is $23.05 an hour and I can afford to work 1 job. I am semi-skilled labor. I am a pharmacy technician who was trained on the job. Therefore no degree necessary. Technician wages equal front end cashier wages so anyone who is not an assistant (lower pay scale) can earn what I do. Myself and most likely the rest of the employees on this site have never heard of glassdoor. I came upon your site by accident when I was trying to find out whether or not I would receive a cost of living raise this year. I would suggest accessing Costco's employee agreement which has an outline of how the pay scale is organized rather than choosing some random unheard of website to base your argument on. Payscale is based on hours worked. As a part-time employee you are only guaranteed 24 hours a week. Obviously if you are only working the minimum it will take longer to reach upper end of scale. I'm lucky in that I was hired full time. I don't donate a thing to United Way/employee club. I've been written up for sick calls myself. Costco isn't the perfect company. But it's the best I've ever worked at.

Paul K. Ogden said...


So you're yet another alleged Costco employee who doesn't understand what the word "average" means? Seriously...ten years and you're making just $23.05 an hour and you actually think that supports the claim that the AVERAGE hourly pay at Costco, sans benefits and overtime, is $20.89 an hour? Let me explain the concept of an average. When doing an average calculation you add up everyone's pay and then divide it by the number of people. Obviously your claim, taken even in the best light, still doesn't support the $20.89 hourly clailm.

FYI, Glassdoor is a very well-known website. Pay scales don't matter if you don't know how many employees are at those levels. The fact is the few people, like yourself, who write in in support of the $20.89 an hour claim actually then offer information about their own pay which undercuts the $20.89 claim.

Robert mendoza said...

Paul you have no factual evidence of any kind. Quit getting your facts from so called employees and the web. What's the average tenure of a Costco employee?

Paul K. Ogden said...

Really, Robert? And what is the "factual evidence" to support the $20.89 claim? The answer is absolutely zero. It's a self-serving claim by the Costco CEO who is trying to court good favor with the public.

No one has come forward with any information (including Costco management) to support the claim that the average hourly pay (not salaried employees mind you) of a Costco employee is $20.89 before overtime and benefits are considered. On the other side are literally thousands of Costco employees self-reporting their income on that dispute the $20.89 an hour claim as do. (Sorry, but that is "factual evidence" obviously don't have a law background.) Even the supposed Costco employees who write in to support the Costco claim proceed to undercut it with their own citation of their pay. If you really believe Costco hourly employees (again salaried employees are specifically excluded) have an average tenure of 10-15 years at the company, I'm sure you also believe Santa Claus and the Easter Bunny are real too. Can't help you there.

Norm said...

I noticed you didn't print or respond to my last post. You could be behind it's only been a few days but I wanted to update it with the response I should have written then. Your response to me was initially was that because I was presenting data that contradicted yours I was lying about being a Costco employee and that I wasn't the average employee. I presented 2 pieces of data that could be used to prove yours wrong. However, because you were kind enough to explain averages to me, I will return the favor and explain statistics to you. I'm sure that when you got your liberal arts degree at whatever college you attended you neglected to take any science or math classes so this should be educational for you. Your 300 employees on glassdoor your "well known" website could be representative of the Costco population as a whole if the survey had been a random survey. However, the kind of survey it was is called a voluntary survey. Those show interesting anecdotal data but are never used for actually studies because they suffer from what is called voluntary survey bias. That is the people taking the survey have to 1. know the survey exists 2. have access to the medium the survey is given on and 3. take the time to fill out the survey. Voluntary surveys show opinionated views and that is the bias. Thus for your glass door survey it's people that are mad- they just lost their job. People that are happy- they just got a job or the random person that is bored and fills out the survey because they have nothing better to do. But I'm going to go down your path of thinking and say that glass door is 100% representative of the average costco employee. I'll choose the highest average on glass door the cashier which pays $15/hr and say that is the average employee because Costco says it's average employee gets paid $20/hr. So we have a $5/hr difference. Trust me in the end this will support your bad math better then choosing the $12.38/hr employee. in reality since there are 3 categories we should be taking the average of the 3 but it'll take up more space. Now we'll choose Craig Jelinek arguably the highest paid employee at Costco made 5.62 million in 2014. Now we'll take his salary and divide it among the 200,000 employees that Costco has and now each one of them makes an extra $30 a year. Now let's take that $30/year and divide it by the total hours they worked which we determined minimum was 1248 and now each employee has an additional $0.024/hr so by your argument 5/.024 costco has 208.33 Craig Jelinek's on its payroll and everyone else makes a lot less. But the thing is that's not really how corporations work. The shareholders don't want to share their profits with employees so there are a few high paid employees and a ton of low paid employees. It's funny how even a huge salary doesn't really make that much of a difference when your talking about a ton of employees. Furthermore, the average reported was salary. Which for Mr. Jelinek is $650,000/yr so now you are talking about $3.25/yr per employee or 0.0026/hr so now you need 2000 CEO's to change the average wage to $20/hr. Since Costco is reporting a median pay rate all of this math is moot but I just wanted to show you that you need to do a little research before you write about things you don't know about. You either either looked at a 1000 pieces of data and then chose the 1 that agreed with your flawed logic or you chose the 1st one you found and didn't look any farther to make sure it wasn't some sort of right wing government conspiracy crackpot website. But do yourself a favor. Take a statistics class before you do any further writing so that you know whether you are looking at flawed data or not. Take care and don't worry I won't waste my time looking at your poorly researched blog again.

Paul K. Ogden said...


The problem is your writing comments on an article that is nearly a year old. The only people reading this are those Costco fanatics who google it and want to defend their favorite company, backing up a claim the $20.89 an hour claim that doesn't have a scintilla of support. Why don't you instead write comments on the newer article I wrote, the Walmart one where I prominently discussed Costco's fake $20.89 claim.

Here are some thoughts though in response to your comments. Again, you offer ZERO support for your claim.

*The $20.89 hourly claim is for hourly employees, not salaried employees, and the claim specifically excludes benefits

*You said the claim is that the median pay is $20.89. No the claim is that the average pay for hourly employees is $20.89. Big difference between average and median, though I suspect actually the median figure would be lower than the average as more the number of lower paid employees in retail establishments is generally much greater than the higher paid hourly employees

*The Costco employees self-reporting on Glassdoor are not 300, but 2,340

*The claim that all these people who rush to Glassdoor to report their Costco pay are fired employees is absurd. I know the idea of a voluntary poll. I taught political science, including polling, at the college level for nearly 25 years. But your suggested motivation makes no sense. So you think the only people who report pay on Glassdoor are fired employees - that people might not have an incentive to report pay because they want to shop around and compare?

*The pay on Glassdoor has been confirmed by actual Costco employees. Even the supposed Costco employees who write in to defend the claim, end up sharing pay information that supports the Glassdoor numbers and undercuts the $20.89 an hour claim. Even YOU do that. You say that your pay, as a very experienced Costco employee has topped out at in the $23 range. Pray tell how do you get to an average of $20.89 when you admit most employees are much less experience and starting out in the $12-$14 range? Again, do you not understand the concept of an "average?" And, again, you don't get to include salaried employees and bonuses (or overtime) on the claim. The CEO's claim specifically said the pay of Costco hourly employees, not counting benefits or overtime.

*How much Costco pays according to its employment documents means nothing if you don't know how many people are at each level. Nonethless, even that information undercuts the $20.89 claim.

*Business Week just regurgitated Jelinak's unsupported $20.89 claim like other media outlets. Many of the Costco employees who wrote in on the comments section disputed the claim, citing their much, much lower hourly pay.

*I did take an applied statistics class in college and did well in it. I gather you didn't however.

*This article has been up for a year and nobody has offered one scintilla of evidence in support of the $20.89 an hour claim. Even the supporters of Costco, and people who claim to work there fail to back up their claim, even with anecdotal evidence.

Please in the future write comments to the most recent Costco article.

Nicolas Martin said...

Rather than rely on web sites of dubious accuracy, I contacted Costco's corporate communications directly yesterday. I received the following reply today:

"Costco Wholesale can confirm that the average wage for hourly employees in the US is greater than $20 per hour. This average wage includes the accrual for the twice-a-year Extra Checks for long term employees, but does not include any premium pay for overtime."

I believe this is the "scintilla of evidence" that has apparently been needed. Costco is a publicly traded corporation that would be extremely unlikely to provide inaccurate or dishonest information about employee wages.

Paul K. Ogden said...
This comment has been removed by the author.
Paul K. Ogden said...

Just now saw the second comment. How in the world is this evidence, Nicolas? Employees' wages are not part of the information a publicly-traded corporation has to provide.

You actually believe they pay unskilled hourly workers an average of $20.89 an hour? I have some swampland to sell you.

cinc210 said...

Hey, about the Dude that complains about NAFTA, there are lots of factory jobs that also pay under 20 an hour. In fact I seen several ads in Craig list around 9 to 12 an hour though temp agencies. Its funny how conservatives are against a minium wage for service workers but support high tariffs to keep factory work form going oversea. That is pricing up labor thorough the government as well.In fact tariffs to keep jobs in the US prices up goods more than higher wages at retail stores.