Costco Hopes Pay Deal Will Avert Strike By Teamsters Union

February 4, 2025

Costco, the warehouse club famous for bulk items and cheap hot dogs, is trying to avoid what would be its first-ever employee strike. The Costco Teamsters union, which represents 18,000 workers, threatened to stop working after January 31 unless the company raised wages and benefits to reflect inflation. With only a few hours left before the strike was scheduled to start at 56 stores across six states, Costco reached a tentative agreement with the union over the weekend. Now it’s up to union members to decide whether to accept the deal or not. 

The strike would have been the largest ever at an American retail chain. The Costco Teamsters union represents a small percentage of the store’s total employees: just 8 percent of 219,000 U.S. workers. But as a part of the International Brotherhood of Teamsters union with more than 1 million members, it can call on many allies to set up picket lines and increase economic pressure on the company. Costco reported an annual net income of $7.4 billion last year — nearly double what it earned in 2019. The Teamsters union says those strong financial results support their argument for improving wage and benefits packages for employees.

Of course, the proposed agreement between Costco and its Teamsters union does not completely end the threat of a strike. For example, unionized workers at Boeing went on a two-month strike last year after voting down a deal the company proposed. But most tentative deals do result in a final contract. The next step is for members of the union to vote on whether to approve the deal or keep negotiating. Costco has a reputation for relatively high worker salaries and benefits, especially compared to other retail stores. The company recently raised pay for employees at non-union stores by a dollar an hour. 

Questions:

  1. Why did members of Costco’s Teamsters union threaten to strike against the company?
  2. What are the benefits of being part of a big union like the Teamsters, which has more than one million members?

Sources: Chris Isidore and Vanessa Yurkevich, “Costco And Teamsters Reach A Tentative Deal To Avert A Strike,” CNN, February 1, 2025; Jaewon Kang, “Costco, Union Reach Tentative Deal, Averting Strike,” Bloomberg, February 1, 2025.