Costco CEO Says Higher Minimum Wage Means ‘Better Jobs and Wages’

by Mike Hall, Jan 31, 2007

Opponents of a clean bill to the raise the minimum wage—which is at its lowest buying power in more than 50 years—claim that without a multibillion dollar tax break lifeline, the nation’s business community faces economic disaster. We are not the only ones who say that is balderdash.

Jim Sinegal, who founded the discount chain Costco Wholesale Corp., told The Washington Post yesterday that it makes good economic sense to raise the minimum wage.

The more people make, they better lives they’re going to have and the better consumers they’re going to be. It’s going to provide better jobs and better wages.

Sinegal is part of a group of business leaders we told you about last week who say it’s time to raise the minimum wage—Business Owners and Executives for a Higher Minimum Wage. Chuck Collins, a senior economist for the Institute for Policy Studies, has more on the business group Tompaine.com.

The Costco chief certainly knows what he’s talking about. His successful venture, launched in 1983, now has 130,000 workers and operates 504 stores, where the average worker makes $17 an hour and the lowest-paid earns $11 an hour. It’s good business sense says Sinegal.

In my view, some of these industries that pay minimum wage are constantly turning their people over. They spend more on turnover than they would in paying the additional wages.

The Republican minority in the Senate used a “filibuster by amendment” to kill a House-passed, clean minimum wage bill to boost the decade-old $5.15-an-hour federal minimum wage to $7.25. With the addition of more than $8 billion in tax cuts, they’ve agreed to move to a final vote on a wage increase, likely tomorrow. But the bill still must be reconciled with the clean House bill and House leaders say billions of dollars in business tax gifts don’t belong on a minimum wage bill.