The Costco Cashier Who Turned Down Every Promotion

The Arizona Costco Cashier Making $32.90 an Hour—Who’s Already a Millionaire

It’s 9:02 a.m. at a Costco self-checkout in Tucson, Arizona. 60-year-old Tony Bajart picks up his scanner and starts making his rounds among six registers. He started here in 1986, gathering carts in the parking lot for $5.85 an hour, and 40 years later, he’s still doing essentially the same job.

But here’s the thing, subscriber: this man is already a millionaire. His retirement account¹ holds more than $1,000,000. The company has offered him a management position more than once. Every time, he’s said no.

What’s actually strange here isn’t Bajart—it’s Costco. Most companies find long-tenured employees burdensome. They’re expensive. Especially if they show no interest in moving up. Costco does the opposite: it works hard to keep him exactly where he is.

The reason shows up in Costco’s income statement. The numbers make it clear that holding on to veteran employees like Bajart is, structurally, good for business.

The Man Who Refused a Promotion, and the Company That Won’t Let Him Go

Follow Mr. Bazzar’s career, and you’ll see how Costco treats its people.

He started in 1986 collecting shopping carts in the parking lot of a Price Club store in Tucson. The pay was $5.85 an hour — nearly double what he’d made at the neighborhood grocery store he’d worked at before. Price Club merged with Costco in 1993. A few years in, he moved indoors to escape the heat and took on early-morning stocking; once his first child was born, he wanted more regular hours, so he switched to greeting members at the entrance. Eventually he landed at the register, and it fit. He liked handling money, and he liked talking to people.

Today his hourly wage is $32.90. Costco’s health insurance covered all three of his wife’s brain surgeries, and he took nearly a year of paid leave to care for his family. A standard doctor’s visit copay is $15. As he puts it, you never know how deep this coverage really goes until something happens.

The company has offered him a management position more than once. He’s turned it down every time. He likes meeting members directly at the register, and he believes that not being a boss actually makes him a better mentor to newer employees.

The company doesn’t treat his refusal to be promoted as a problem.

Costco has recently created a role called “culture coach” at several stores. It’s not a management position — it’s an official mentorship role for long-tenured hourly employees. It exists to keep the experience of people who don’t want to be promoted inside the organization. The top hourly wage rose from $31.90 to $32.90, and employees with 30+ years of tenure now get an extra week of vacation.

The general manager who has run the Tucson store for eight years explains the strategy this way: when a longtime employee leaves, the average wage across the store’s 380 workers goes down — which helps the bottom line — but you pay for it in experience. The more new hires you bring in, he adds, the more the core culture gets diluted.

That word — diluted — is worth pausing on. On a balance sheet, senior employees are usually booked as costs. But this manager is describing their departure differently: as the thinning-out of experience and culture the company once held.

The English draft matches the Korean source accurately in meaning, numbers, structure, and terminology. No corrections needed.

Membership fee revenue is roughly half of operating income

So how much is that “asset” actually worth? I pulled up Costco’s fiscal year 2025 annual report² and ran the numbers myself.

Revenue came to $269.9 billion. Subtract the cost of goods sold, and gross profit is $30 billion. But selling, general, and administrative expenses came to $25 billion. Net the two out, and operating income from selling merchandise alone is just $5.1 billion — only 1.87% of revenue.

Yet Costco’s actual operating income is $10.4 billion. Where did the other $5.3 billion come from?

Membership fees.

Annual membership fee revenue of $5.3 billion accounts for 51.3% of operating income. Comparing the two figures reveals just how central membership fees are. That said, this ratio doesn’t mean membership fees are entirely cost-free, nor that operating income can be neatly split between merchandise and fees. To put it a bit provocatively: Costco isn’t a company that recruits members in order to sell them things — it’s a company that sells things cheaply in order to keep hold of its members.

And membership fees renew every year.

This isn’t one-and-done revenue from a single sale — it’s subscription revenue, where each member decides all over again, once a year, whether to pay up again. As of 2025, the renewal rate was 92.3% in the US and Canada, and 89.8% worldwide.

Now let’s add in the scale of membership. Costco has 81 million paying members worldwide. That means even a 1-percentage-point wobble in the renewal rate moves 810,000 people. And the fees those 81 million people pay prop up half of operating income.

Now let’s go back to Mr. Bazaar at the register.

When a member decides whether to hit the “renew” button, where does that judgment actually form? Product selection and pricing matter, of course, but for most members, the checkout line is the only moment they interact with Costco the company as one human being to another. Does the line move fast? When something goes wrong, who fixes it? According to Costco’s internal data, the fastest cashiers process 70 members per hour, while the average is 57. That gap in processing speed is what shapes the experience every member has, at every store, every day, in the seconds right before they walk out the door.

Mr. Bazaar is working exactly where that renewal decision gets made. The longer an employee stays and the more skilled they become, the better the checkout experience gets for members; that experience protects the renewal rate; and the renewal rate sustains a massive stream of membership fee revenue. It’s less a heartwarming anecdote than a story told through the income statement.

Costco doesn’t hide this logic either. Its annual report states it plainly: the company’s philosophy on employee compensation is not to minimize wages and benefits. To reduce turnover and boost productivity and satisfaction, it says, the company must maintain compensation better than the industry average — and so it absorbs costs that other employers would pass on to their workers.

The order of priorities in the code of ethics tells the same story. First, comply with the law. Second, take care of members. Third, take care of employees. Fourth, respect suppliers. And at the very end, this line is added: if the organization delivers on these four things throughout, the ultimate goal — rewarding shareholders — will follow. Shareholders sit at the very back, and notably, they’re written in not as an input, but as an outcome.

So Is Raising Wages Enough?

Read this far, and the conclusion looks simple: raise wages, turnover drops, profit follows. But carrying that conclusion forward as-is is risky. Three things need checking.

First, the turnover numbers.

Multiple outlets now place Costco’s 7% turnover rate next to the retail industry average of 60% and call it a tenfold gap. But Costco’s own filings spell out what that number actually measures. It means employees who have worked at least one year have a 94% retention rate — in other words, turnover among people who’ve already cleared their first year runs 6-7%.

McKinsey’s 60% figure for retail frontline turnover, by contrast, includes first-year attrition. Given that a large share of retail turnover happens in that first year, the two numbers aren’t measuring the same thing. Costco doesn’t separately disclose first-year turnover. Costco’s retention is genuinely excellent — that part is true. But the “tenfold” framing circulating now stacks numbers measured on different bases. This is the kind of quiet unit mismatch you run into constantly when you work with data.

Second, the context behind this particular raise.

The original article describes the raise to $32.90 and the 30-year service leave as if Costco offered them unprompted. The timeline tells a slightly different story. In January 2025, 18,000 unionized Costco Teamsters³ members voted 85% in favor of a strike authorization. Had it gone through, it would have been the largest retail strike in U.S. history. Days before the strike deadline, Costco announced a three-year wage increase plan covering all non-union hourly employees: a top hourly wage of $31.90, plus an additional $1 increase in both 2026 and 2027. The 30-year service leave was announced at the same time. The strike was averted with a tentative agreement reached right around the deadline.

$32.90 is the second-year step of that three-year package. The union represents just over 8% of U.S. employees, and the high-wage strategy itself is a genuine 40-year-old commitment — but the timing of this particular raise sat squarely on the negotiating table. Reading it as a pure gift misreads the facts.

Third, and most important: wage investment alone doesn’t make this system run.

MIT Sloan’s Zeynep Ton has tracked Costco, Trader Joe’s, Spain’s Mercadona, and QuikTrip for over 15 years. What she found early in her research was that this virtuous cycle doesn’t spin on its own. Ton lays it out this way: the first element of a good-jobs system is investment in people, but the real trick lies in four operational choices — focus and simplify, standardize while empowering, cross-train, and operate with slack.

Let’s map Costco onto each of the four.

• Focus and simplification: A single warehouse carries under 4,000 SKUs⁴ — a fraction of what a general merchandise retailer stocks. Items are stacked and displayed on pallets, there’s no advertising, and store hours are short. That’s why SG&A runs just 9.25% of revenue.
• Standardization with empowerment: Pay raises happen automatically every 1,040 hours worked. There’s no room for managerial discretion.
• Cross-training: This is literally Bazar’s résumé — carts, pre-dawn stocking, the entrance, the checkout counter, all of it.
• Slack: Costco stations its 40-year veteran at the self-checkout.

Let’s linger on that last point. Self-checkout is technology adopted, in principle, to cut cashier headcount. Yet Costco’s own data shows self-checkout is slower than staffed checkout — and knowing that, it still keeps its most experienced employee there. Instead of using technology to cut labor costs, it chose to put a person right next to the technology.

To sum up: high wages are the output of this system, not its starting point. If you don’t cut SKU count to 4,000, don’t build a second profit engine like membership fees, and don’t hold SG&A down near 9%, then simply raising wages to Costco’s level is just a cost increase — nothing more.

Oswarld’s Lens

In nearly 20 years of building GTM strategy, there’s one misunderstanding I run into more often than any other: the failure to distinguish between “copying” a good case study and “understanding” it.

Conversations with executives who bring up the Costco example almost always start with wages. “Should we be raising pay on the frontlines too?” But the question I always throw back is a different one: have you calculated how much revenue or profit that frontline employee is actually protecting?

I think the good experience created by a 40-year cashier has to be understood in connection with membership renewals — because membership fee revenue is roughly equal to half of operating profit. So the wages and benefits paid to that employee aren’t simply labor cost; they’re spending to protect the renewal rate that props up half of operating profit. Most companies, by contrast, have no idea how much profit a frontline role is actually protecting, and manage that position purely as a cost line. Not knowing the number is exactly why it’s the first thing to get cut.

So as I see it, the real lesson of this case isn’t “treat your employees well.” It’s calculate first where profit actually gets generated in your company, and who is protecting that point. Only after that calculation is done can you start talking about compensation. Raise pay first without doing the math, and you don’t end up building a Costco-like structure — you just shrink your margins.

I don’t think the fact that shareholders are listed last in Costco’s code of ethics is an act of modesty. It’s a written order of operations: comply with the law, take care of members, employees, and suppliers first, and shareholder returns follow.

Closing

The reason Costco has held onto a cashier who turned down a promotion for 40 years comes down to the profit-and-loss structure. Membership fees are a critical revenue source, and the checkout counter is where a member’s shopping experience gets wrapped up.

But you can’t just lift the wage piece out of this model and copy it. That wage only works because it’s paired with an SKU count trimmed to under 4,000, a second revenue stream in membership fees, and an SG&A ratio in the 9% range.

So the question isn’t “should we pay more too” — it’s “where does our profit actually come from, and who’s guarding that spot?”

In your organization right now, who’s guarding the point where profit is actually generated? Tell me in the comments whether that position is treated as a cost or as an asset. I’ll feature the most compelling examples in the next issue.

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💬 Share your thoughts or experiences on this topic in the comments. I’ll draw on them for the next issue. 📨 If you know someone who’d find this useful, please share this piece.

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References & Further Reading

Primary sources

• “He Earns $33 an Hour as a Costco Cashier. Now He’s a Millionaire.”, The Wall Street Journal, July 9, 2026. Read the original ··· This is the article that sparked today’s piece. It reads well as a day-in-the-life profile following Mr. Bazar.

• Costco Wholesale Corporation, Form 10-K, Fiscal Year 2025, SEC, 2025. Read the original ··· This is the source document behind today’s numbers. The $5.3 billion in membership fees, $10.4 billion in operating income, and 92.3% renewal rate all come from here. I especially recommend the “Human Capital” section — seeing a public company state, in a legal filing, that it will not minimize wages hits differently when you read it yourself.

• Zeynep Ton, “The 4 essential choices in a good jobs system”, MIT Sloan, 2023. Read the original ··· Professor Ton’s own summary of the four operating choices. This is the backbone of Chapter 3 today.

• McKinsey & Company, “Frontline retail workers and the Great Attrition”, 2022. Read the original ··· This is the source of the 60% frontline retail turnover figure. You can see for yourself how the measurement basis differs from Costco’s numbers.

Background

• Zeynep Ton, The Case for Good Jobs, Harvard Business Review Press, 2023. ··· A book that argues, through 15 years of field research, that good jobs are a competitive advantage rather than a cost. Alongside Costco, it covers cases like Mercadona and QuikTrip.

• Costco Wholesale, “Mission & Ethics”. Read the original ··· A five-line code of ethics. Worth counting for yourself exactly where “shareholders” ranks on the list.

• “Costco union representing 18,000 workers authorizes nationwide strike”, CNBC, January 20, 2025. Read the original ··· This article lets you check the timeline behind this round of wage increases — context missing from the original WSJ piece.

Past issues worth reading alongside this one

• (To confirm: add links here to 1–2 past issues covering organizational/talent strategy or retail business models)

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The author is Oswarld (Kwangseob Ahn). Current roles: Adjunct Professor at Sejong University, Strategy Consultant at INLEVEL9. Career, research, books, and recent work are kept current on the About page. Latest · July 2026: HEMA-2: A Consolidation-Aware Tri-Memory Architecture with Multi-Channel Scheduling for Lifelong Conversational AI.

📝 Glossary

Footnotes

1. 401(k): America’s flagship employer-sponsored retirement plan. Employees set aside a portion of their salary, the company matches a percentage of it, and the combined funds are invested in stocks or bonds. Because the money compounds over time, someone like Mr. Bazar who contributes for 40 years ends up accumulating not just savings but the stock’s price appreciation as well. ↩

2. 10-K (Annual Report): A disclosure document that publicly traded U.S. companies are legally required to file with the Securities and Exchange Commission (SEC) every year. Unlike marketing materials, it carries legal liability, making it one of the most honest windows into how a company itself describes its strategy and risks. ↩

3. Teamsters: One of the largest labor unions in the United States. Originally built around transportation and logistics workers, it has since expanded its organizing reach into warehousing and retail. At Costco, roughly 18,000 employees belong to the union. ↩

4. SKU (Stock Keeping Unit): A unit for counting the distinct products a store carries. Even the same product counts as a different SKU if it comes in a different size or color. Fewer SKUs mean simpler inventory management and simpler employee training. ↩