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A strike at Costco (COST+0.17%) is now a real possibility after the union representing thousands of workers voted to authorize it.
With 85% of Teamsters members backing the move, workers are prepared to walk off the job unless the retailer comes to the table with what they deem to be a fair agreement. The union, which represents over 18,000 Costco workers nationwide, has been in contract negotiations for months. The current agreement expires on Jan. 31 and, without a resolution, workers may strike to demand higher wages and improved benefits, pointing to Costco’s record profits as justification for their demands.
“Our members have spoken loud and clear — Costco must deliver a fair contract, or they’ll be held accountable,” said Sean M. O’Brien, Teamsters general president. “From day one, we’ve told Costco that our members won’t work a day past January 31 without a historic, industry-leading agreement.”
Why a strike?
Teamsters are pushing for better wages, benefits, and working conditions, arguing that Costco’s refusal to offer a fair contract is unacceptable, especially considering the company’s massive financial success. Costco recently reported $254 billion in revenue and $7.4 billion in profits for fiscal 2024, which ended on Sept. 1. Despite this, the company has been reluctant to meet the workers’ demands, according to the union. Costco employs roughly 300,000 people across the U.S.
“We are the backbone of Costco,” said Bryan Fields, a Costco worker in Baltimore, in a Teamsters statement. “We drive its success and generate its profits. If the company doesn’t step up, the responsibility falls on them. They’ll be striking themselves.”
Teamsters have been preparing for the possibility of a strike with practice pickets across the country. In recent weeks, workers held demonstrations in California, Washington, Long Island, and Southern California.
Costco’s Response
Costco has defended its position, claiming it treats workers better than its competitors. But Teamsters argue that the company’s actions don’t live up to that reputation.
“This strike vote is a direct response to Costco’s greed and blatant disregard for the bargaining process,” said Tom Erickson, director of the Teamsters Warehouse Division. “Costco has less than two weeks to fix this. If they don’t, they’ll face the consequences.”
DEI controversy adds fuel to the fire
Adding to the tensions, Costco is facing shareholder scrutiny over its Diversity, Equity, and Inclusion (DEI) programs. A vote scheduled for Jan. 23 will determine whether shareholders support a proposal from the National Center for Public Policy Research to end Costco’s DEI initiatives. The conservative think tank argues that such programs are financially risky and discriminatory, citing concerns about hiring and supplier practices based on race and gender.
Costco’s Board of Directors strongly opposes the proposal, urging shareholders to reject it. The Board insists that DEI efforts are in line with Costco’s core values of inclusion and respect, which they argue are ultimately good for business.
What’s next?
As the Jan. 31 contract deadline nears, the pressure is mounting on Costco to resolve its labor dispute and avoid a strike. With record profits and rising worker unrest, the company’s response in the coming days will be critical. Whether or not the strike happens will depend on whether Costco can reach a fair deal with Teamsters before the end of the month.
At Amazon (AMZN+2.09%) and Starbucks (SBUX+2.61%), workers recently went on strike during the holiday season, further emphasizing the growing demands for better pay and working conditions at major retailers.