Wage pressure continues

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Lois A. Bowers
Lois A. Bowers

It was less than three weeks ago that I wrote about the plans that Walmart had for increasing wages and benefits for its employees.

This past week, Walmart rival Costco Wholesale Corp. followed suit with its own announcement.

The company reviews its pay scales and employee agreements every March, Richard Galanti, executive vice president and chief financial officer, told those participating in a March 3 investor call. This year, it decided to raise entry-level hourly wages for the first time in nine years.

“Since 2007, our entry-level wage in United States and Canada was $11.50 or $12 an hour,” he said. “Effective this month in the United States and Canada, we are increasing our starting wages from $11.50 and $12 to $13 and $13.50. So up $1.50.”

Top-of-scale wages at U.S. stores have been about $23, Galanti said, adding that it takes the average full-time employee 4.5 years to reach the top of the scale.

“This is a physically challenging job,” he said. “You're on your feet, and you're lifting cases. You're pushing carts at these entry-level jobs, and so we thought it was time to do it.”

Costco, the country's second-largest retailer, isn't just competing with the largest retailer, Walmart, for workers, of course. It's competing with the senior living industry.

And so the “Walmart effect” that Argentum President and CEO James Balda described — the phenomenon that attracts existing or potential senior living direct care staff members to working in retail instead of providing care for older adults — expands.

More wage pressure also came this past week, on March 2, in the form of the tiered increase in minimum wage signed into law by Oregon Gov. Kate Brown, who had identified it as her top priority. Beginning in July, the new state law gradually will increase the current $9.25 hourly minimum wage over the next six years so that, by 2022, it will be $14.75 inside the urban growth boundary of Oregon's largest city, Portland, $13.50 in midsize counties and $12.50 in rural areas by 2022.

Oregon's changes follow minimum wage increases in 14 states that became effective Jan. 1 and bumps planned for later this year in Maryland and Minnesota.

These two events, occurring on two consecutive days, are helping to ensure that staffing issues remain a top challenge for the senior living industry.

Lois A. Bowers is senior editor of McKnight's Senior Living. Contact her at lois.bowers@mcknights.com. Follow her on Twitter @Lois_Bowers.

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