Though some cities and states are in the process of raising the minimum wage, quite a few companies are already paying their employees more.
Many of these companies justify paying their workers higher wages because they boast better retention rates and more productivity.
Costco pays entry-level workers a minimum of $13 an hour, but the average Costco worker makes around $21 an hour. The highest-paid workers make around $22.50, and Costco CEO Richard Galanti has said it takes full-time workers about four years to reach that rate.
Because their high wages are high, Costco’s turnover rate is outstandingly low; as of 2014, it was 5 percent.
The Container Store also pays workers nearly double the minimum wage. CEO Kip Tindell has said in the past that he believes one great worker is just as productive as three good workers. “You can pay them twice as much and still save, since you get three times the productivity at two times the cost,” Tindell said in an interview.
In 2014, Container Store employees made a yearly average of $50,000, more than double the $23,690 average salary.
Trader Joe’s and Whole Foods also offer salaries that are higher than average. Starting pay for a Trader Joe’s crew member in 2013 was between $40,000 and $60,000. Whole Foods employees made slightly less that year, and the average employee was paid $39,289.
Ben & Jerry’s also aims to pay workers a livable wage. According to their site, Ben & Jerry’s recalculates their full-time employee’s salaries based on the cost of living in Vermont. As of 2015, workers were making $16.92 an hour.
Many of these companies pay their employees more because they want to keep workers happy, encouraging them to stay with the company.
From Tindell’s three-to-one theory to Costco’s low turnover rate, it’s clear that these companies can sustain their high wages because they retain most of their employees.
These companies have found that when workers are paid livable wages, they often work to be better employees, which leads to a better company. Raising the minimum wage can be difficult on a city-wide, state-wide or country-wide scale, but companies voluntarily deciding to raise their own wages has worked surprisingly well across several industries.
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