Costco is a popular American retailer chain, founded in 1983, in Seattle. They operate on a membership basis and are very convenient for those buying goods in bulk. They are a multinational corporation with headquarters in Washington, United States. It is one of the biggest retailers in the world today. It employs more than two hundred thousand people. It is popular because of its great selection of high-quality products. Is Costco union-friendly? let’s find out
Unions are organizations within a company that seeks better working conditions for their employees, like better wages, benefits such as medical and financial benefits. They ask for better conditions for union members, but it ends up benefitting all employees. The more people unions have, the better conditions they can work with. In multinational corporations like Costco, unions become very important because the corporation can mistreat or overwork the employees otherwise. Some employees at Costco are part of a union.
This doesn’t mean Costco itself is union-friendly, because no employer can be union-friendly. Their union is the reason for their work environment having such a good reputation in the public imagination. Costco has over 17,000 unionized employees. They are all represented by the Teamsters organization, which makes sure labor contracts are fair. Some states are unionized, and some are not. To understand the reason for this, we should get into a bit of Costco’s history.
Costco’s Merger
Today’s Costco is the result of two merged companies. Price Club was a retail warehouse store founded in 1976. In 1983, Jim Sinegal and Jeffrey Brotman founded Costco. In 1993, ten years after its founding, Price Club merged with Costco to become what it is today. Price Club’s employees had a union, while the Costco employees of the time did not. Even after the merger, these employees kept their union.
Costco’s Union
Their union makes sure that union employees get the maximum wages possible, good enough job security, and other employee benefits. Some benefits of Costco’s union are:
- Union members cannot be fired as and when the employer wishes. Usually, warehouse employees are fired just like that, so even this step is a big deal in the industry. If Costco wants to fire a union member, they need to go through a lengthy process. This gives the employee precious advance notice and they can start looking for other employment opportunities.
- The current minimum wage as set by the federal government is $7.25 by the hour. Costco’s minimum wage is a lot higher than this, set at $16 per hour. Their average wage is around $24 per hour.
- Their labor contract says that breaks in between working hours and lunchtime will happen on time, which is also uncommon for retail employees. In a lot of companies, breaks and lunches are just overlooked and said to be a waste of time.
- In addition to better working conditions, Costco’s union members also get a pension plan of sorts. Each hour that the employee works for will contribute around $1.25 to their future pension. This is guaranteed legally and has to be compulsorily paid by Costco when the employee retires.
The union has benefitted non-union employees greatly too. It would not be fair if Costco had too much of a wage gap between union and non-union employees. Besides, keeping higher wages means fewer employees joining the union, which is what companies want. So, Costco has increased wages for all employees, though union members do get more benefits as a result of their better contract.
Locations Where Costco Is Union-friendly
- California
- New York
- Virginia
- New Jersey
- Maryland
Something to keep in mind is that all warehouses in these states are not unionized. For example, California has 133 Costco warehouses. Out of all these, only 27 warehouses are unionized. Even then, California has the most union employees out of all Costco locations. Most of the employees at Costco are not in the union, as only around 17,000 out of their 200,000 employees are part of their union.
How To Join The Union
If you don’t want to join their union, you just don’t. If you want to, it is unfortunately not free. Even the union is kept in place through the Teamsters organization. An initiation fee to the union would be $200, and this can be paid over the course of three months. After this, they charge a monthly fee that is 2.5 times your hourly wage. This amount could increase as and when your salary increases.
Conclusion
So, if you ask does Costco is union-friendly the answer is Costco’s union comes with pros and cons. While it is useful to get better working conditions, this union is not solely managed by their employees. There is an organization that will take the members’ opinions and presents them to Costco. This organization will negotiate with Costco on the behalf of all the members. As an employee or prospective employee at Costco, you can evaluate the benefits and disadvantages and make a choice that is beneficial to you.
