It’s so easy to love Costco: everyone can appreciate a company with a conscience.

But is Costco really the champion for workers’ rights that it claims to be?

Costco’s reputation as a good company is well-known. Although they’re the second-largest retailer in the U.S. behind Walmart, their employee wage policies could hardly be more different. Costco’s average hourly wage currently stands at over $20/hr, well above the nationally mandated minimum wage of $7.25. They gave raises during the recession. They offer generous benefits packages to staff, and participate in employee-matching for 401k. And they employ over 185,000 people nationwide. That’s a huge positive impact on the workers of the retail industry.

And recently, with Costco’s announcement that they’ll stay closed on Thanksgiving Day, it seems they can do no wrong, in terms of workers’ rights.

In an interview with ThinkProgress, a spokesperson for Costco stated the following:

“We simply believe that [our employees] deserve the opportunity to spend Thanksgiving with their families. Nothing more complicated than that.”

It’s amazing to see a company that’s proving a sustained commitment to employees. Employees aren’t just cogs in a machine; they’re people.

But of course, it’s rare that a company gets everything right; Costco has its faults.

Ever been to the store on the weekends? You’re likely to have noticed people who are strategically placed, offering out free samples.

As it turns out, those workers haven’t been counted as part of Costco’s employees. The people who prepare and serve the food samples are considered outside vendors—and because of that, they aren’t paid like the rest of Costco’s employees.

These workers (which make up 10% of all the people who regularly serve in the warehouse) are employees of the company Club Demonstration Services (CDS). But as the North Bay Bohemian reported in 2008, CDS doesn’t offer vendor services to any other company but Costco. That makes these workers look more like shadow employees than outside vendors.

These “demonstrators” are required to work part-time for 6.5 hour shifts, and they receive no benefits. Their pay starts at roughly $11/hr (nearly half of what the average Costco workers make), and can be increased by $0.25 per year. The take-home pay for this job is under $24,000 per year—thousands of dollars less than the equally part-time Costco employee who checks IDs at the front door.

Costco does so many great things for its employees, so we can’t categorically condemn them for bad practice. We shouldn’t hold companies to unreasonable standards, nor should we criticize every small improvement, in the name of larger goals.

But shouldn’t a company that’s famous for its high salary take ownership of the fact that these underpaid workers are seen as Costco employees? Doesn’t their standard of higher employee compensation extend to all employees in the Costco family?

A company that makes the claim that “employees are our most important asset” should treat all their workers as such.

Costco’s commitment to their employees is inspiring. But their raising the bar should extend to everyone who works for Costco—it’s that simple.


Kelsey Ryan is the editor of Groundswell’s magazine. She’s a linguist, fledgling Tolkien scholar, knitter, Oxford comma proponent, and firm believer in the use of stories for social good. Explore her website, or connect on Twitter: @kryanlion.