Costco strike looms. Here’s what you need to know

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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 allow it.

With 85% of Teamsters members supporting the move, workers are ready to walk away from their jobs unless the retailer comes to the table with what they consider a fair deal. The union, which represents more than 18,000 Costco workers nationwide, has been in contract negotiations for months. The current agreement expires on January 31, and without a resolution, workers could strike to demand higher wages and better benefits, citing Costco’s record profits to justify their demands.

“Our members have spoken loud and clear: Costco must deliver a fair contract or they will be held accountable,” said Teamsters General President Sean M. O’Brien. “From day one, we told Costco that our members would not work a day past January 31 without a historic, industry-leading agreement. »

Why a strike?

The Teamsters are demanding better wages, benefits and working conditions, arguing that Costco’s refusal to offer a fair contract is unacceptable, especially given the company’s enormous financial success. Costco recently reported $254 billion in revenue and $7.4 billion in profits for fiscal 2024, which ended September 1. Despite this, the company was reluctant to respond to workers’ demands, according to the union. Costco employs approximately 300,000 people in the United States

“We are the backbone of Costco,” Bryan Fields, a Costco employee in Baltimore, said in a Teamsters statement. “We are the drivers of its success and generate its profits. If the company does not mobilize, the responsibility lies with it. They will hit themselves.

The Teamsters are preparing for the possibility of a strike with practice stakes across the country. In recent weeks, workers have demonstrated in California, Washington, Long IslandAnd Southern California.

Response from Costco

Costco has defended its position, saying it treats workers better than its competitors. But Teamsters say company’s actions fall short this 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 resolve this issue. If they don’t, they will suffer the consequences. »

DEI Controversy Fuels the Fire

Adding to the tensions, Costco is facing shareholder control on 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 says such programs are financially risky and discriminatory, citing concerns about hiring and vendor practices based on race and gender.

Costco Board of Directors strongly opposes the proposalurging shareholders to reject it. The Council emphasizes that DEI’s efforts are consistent with Costco’s core values ​​of inclusion and respect, which they believe are ultimately good for business.

What’s next?

As the January 31 deadline approaches, the the pressure rises on Costco to resolve his labor dispute and avoid a strike. With record profits and growing social unrest, the company’s response in the coming days will be crucial. Whether the strike succeeds will depend on Costco’s ability to reach a fair deal with the 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, with greater emphasis on growing demands for better wages and working conditions in major retailers.