business news in context, analysis with attitude

Costco has raised its minimum starting wage to $17/hour, while Starbucks has raised its to $15/hour.

Business Insider reports that Costco "last raised its minimum wage to $16 in February 2021, from $15 that it had been since 2019. Costco CEO W. Craig Jelinek called the last raise 'good business,' saying higher wages reduce turnover.

"'We're certainly not perfect, but we try to take care of our employees, because they play such a significant role in our success,' Jelinek said.

Meanwhile, The Hill reports that "Starbucks said that hourly wages would start at $15 and could be as high as $23 for baristas by next summer depending on tenure and market … average hourly wages for employees are currently $14 an hour."

Business Insider offers some context:  "As the retail industry is hit with a continuing labor shortage, higher wages have been one way businesses have kept workers on the job. Amazon and Target have both raised minimum wages to $15 in recent years after pressure from workers and the organization Fight for $15. Experts and analysts have called the labor shortage a misnomer, implying that there aren't enough workers instead of that there aren't enough good jobs, and many people are no longer willing to work for low pay in difficult and sometimes dangerous positions.

"Business owners across the industry say they're unable to find staff and in some cases even cite a lack of desire to work, while workers say they can demand better pay and benefits in the tight labor market. Retail and restaurant workers have left the industry en masse to get away from low pay and difficult customers, and a growing number of openings in the labor market is making it easier to transition to new careers."

And, The Hill notes, "The news comes as Starbucks employees at several stores in the Buffalo, New York area are seeking to unionize."

KC's View:

I think higher wages are important.  But it seems to me that if businesses want a sustainable response to staffing issues, they need to invest in creating cultures that value these employees and make them feel as if they are part of the solution, n to part of the problem.  You know, assets, not costs.

This circles back to a discussion we were having here yesterday, about how the people taking these jobs often are the core interface between businesses and customers.  They're on the front lines.  They ought to be valued as such, as being part of the retailer's value proposition.