In early 2014, President Barack Obama paid a visit to a local Costco. He wasn’t there to get a good deal on tires or a big-screen TV but to use Costco as a platform to advocate a higher minimum wage. That’s because the retail giant (where I am lead director) has proved that businesses can perform better by paying more. Costco pays some of the highest wages in retail—almost twice the minimum wage.
And guess what, it’s doing great. At a time when debate over raising the minimum wage is front and center, I have a message for my colleagues in business: We are missing the boat. Knee-jerk opposition is wrong, because as I have seen at Costco and other companies, raising wages will be good for business.
There are three key reasons. First, it will accelerate growth of the economy. Second, it will increase labor productivity. And third, it will reduce government support payments and the pressure to raise taxes on business.
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