Company Paying High Wages And Benefits Just CRUSHED Wal-Mart In Profitability

[KamaAina]

http://freakoutnation.com/2016/02/company-paying-high-wages-and-benefits-just-crushed-wal-mart-in-profitability/

I quit going into Walmart in 1999, because of how badly they treated their employees. A woman who worked there with my niece was very sick, but the store wouldn’t even let her take a break. The woman literally fainted on the spot. It wasn’t easy to stay away because their prices are oh-so-low. But I figured that if I couldn’t find an item at another business, then I didn’t really need it.

Then, too, I knew they exported a large number of our factories to China, because I worked in international business, at the time. Get this, China Labor Watch investigated five Walmart supplier factories and found a total of 10,000 workers suffered serious rights abuses....

Walmart and Amazon pinch pennies and squeeze people, but they are not the only games in town. My daughter and I have a monthly mother/daughter tradition at Costco. We can each do our shopping, while visiting and indulging in interesting food and beverage samples along the way. I like Costco because they take care of their people, while still offering good deals.

Costco pays its employees a living wage, starting at $11.50 per hour and averaging $21 per hour, plus overtime and company-sponsored health insurance. Costco’s CEO and president Craig Jelinek speaks about the economy:

[Warpy]

1. I see the same people at Costco all the time and they look pretty pleased to be working there

I have never seen the same person twice at Wally's (don't look at me like that, I need cheap generics nobody else has) with the exception of one pharmacist who's been there for about eight months. She's looking frazzled, so she might be ready to walk.

Paying low wages and limiting advancement are false economies since Wally's has to pay enormous costs every time an employee quits and a new hire has to be trained. Eliminating this expense by paying well and treating their employees like colleagues has saved Costco this huge cost and IMO, that's what has made it so much more profitable.

[Shandris]

2. Wish we had one over here in Indiana.

My choices are as follows: local (what I buy when it is humanly possible; wasn't always this way, but in the last year especially I've decided to go without even a bit more just to avoid WM and/or Meijer-type stores), Wal-Mart, Meijer, and one of the alternate-branded Piggly Wiggly's (goes by various names in various regions, as I understand it?). That's my "roughly 20 minute drive radius" choices.

IOW, expensive, trash, trash, or kind-of-expensive-kind-of-okay. Not a great choice, all things considered. It's not like they'd have to pay as much either; $11/hr is darn near a corporate wage around here (and is, in fact, better than all but one of our local manufacturers that I am aware of).

[MichMan]

4. Meijer is union

Not sure why you have an issue with Meijer. Their employees are union.

I shop there whenever possible. The closest Costco is an hour away

[Shandris]

5. There was a massive union uprising against them when it went in...

...a decade or so ago (or has it been two...I can't remember anymore!). I also know a very conservative member of my family worked there once and while she never complained about them (and to be perfectly fair, she enjoyed working there for the most part), I don't ever recall her mentioning the 'dreaded U-word'.

So either something has changed (which I did not know), or maybe there's a state by state thing? I won't profess to have followed the history of it closely; I pretty much made my judgement early on and never looked back. I'll have to look at them again and find out though, that WOULD make life a bit easier.

Thanks for the info!

[MichMan]

6. Might not be every store is union

I live in Michigan (Meijer home state) where there is one or more in almost every populated area. Every one I have seen around here is unionized. Might not be true in every state etc.

[spinbaby]

3. I was at Costco this morning

It's 30 miles farther than Sam's Club for us but a far more pleasant experience. $2.99 for a package of 4 LED bulbs this month--stock up.

[leftynyc]

9. That's a great price

Thanks for the heads up.

[passiveporcupine]

14. Wow, and I thought I got a deal at Ace Hardware

Last edited Fri Feb 26, 2016, 05:48 PM - Edit history (1)

getting four bulbs for $11, on a half-off sale.

Ace charges too much for their LEDs, but Walmart and ACE are the only game in town unless I want to make a long trip.

I wish we had a Costco near me. I can't afford to drive to the closest one...sixty miles away. Round trip 120...that does not offset the savings.

I'd be shopping there all the time if it was close to me.

[nxylas]

20. Isn't Ace Hardware worker-owned?

ISTR an article about employee-owned companies that mentioned them

[passiveporcupine]

21. Not sure

customers can join Ace, as a coop, I think. I have the paperwork but haven't filled it out yet. And you get money back at the end of the year (don't know if there is a waiting period...with my electric coop it was like 15 years, but I do get a check from them every year now)...but yes, it may well be employee owned. I never heard that before. I'm heading there now. I'll have to ask them.

[passiveporcupine]

29. Just got back from Ace Hardware,

And yes they are employee owned!

[Nevernose]

33. Our Ace Hardware just shut down, making Vegas suck a little bit more.

I live in probably the most walkable neighborhood in Las Vegas, which by any standards is a normal semi-suburban neighborhood. But there's two grocery stores, three casinos, two gyms, a bar, five restaurants, a dry cleaner, a Starbucks, a couple of convenience stores, and the best comic book store in town -- plus a medical marijuana dispensary just opened up. All this within walking distance, which is AMAZING for Las Vegas.

Sadly, now I have to spend ten minutes driving to my local Mega-Despot.

[Helen Borg]

7. Sadism, basically...

[leftynyc]

8. I love Costco

I live in an apartment so I'm limited on how much bulk buying I can do but I still manage to spend a couple of hundred a month on stuff that is necessary. I'm 55 years old and I've never stepped foot into a Wal-mart.

[Rex]

10. Trickle down policy is garbage. Wal-Mart is a Reaganomics type store.

So I feel no sadness when I see one of these trickle down stores go out of business. My hope is those unemployed find work at a place that will treat them like humans.

[Sen. Walter Sobchak]

11. Costco prospers by catering to the top 20% of households

People who have done somewhere between good to great in the past twenty years,

[newthinking]

12. Costco has shown that the walmart model is an optional (immoral) option

Even though they built their kingdom on poverty, they could halt their slump and boom their business if they truly changed their policies and model to one that is similar, But they won't because when people are that greedy and immoral they just can't "get it". Making money while greatly benefiting community and their employees is just not interesting to them: Even if they get richer doing it.

[Enthusiast]

24. Huge +1!

[Thespian2]

13. The closest Walmart is 10 minutes away,

the closest Costco is 1 1/2 hours away...we shop at Costco...in my experience, Wally's prices are not especially low...some are, some are not...be very careful if you shop at Wally's...

[spinbaby]

53. Low prices are a myth

I used to go to Walmart a lot because I drove an elderly relative who shopped there. I found the place to be badly stocked, limited in brands, and not particularly well priced. The yogurt I buy regularly was vey high priced in slightly different packaging than the other stores. Often, Walmart had the same product in smaller packaging to make it look like a deal.

[cannabis_flower]

15. The only problem is

that Costco just doesn't carry everything that I need to buy and I'm too poor to not ever go to Walmart. Also, some people don't have a Costco anywhere near them. I usually buy produce at Fiesta and frozen food at Kroger. I'm not sure how they are on pay and benefits.

[Barack_America]

31. Kroger is not so good. Aldi also starts at $11.50/hr.

Check one out if you've got one near you. I'm a convert.

[Thav]

36. Aldi is excellent.

And recently the have made moves to be more healthy, no artificial colors in their private label stuff.

[cannabis_flower]

37. No Aldi near me

[1939]

52. Bingo

Costco is profitable enough to pay higher wages because they have a limited stock (in terms of variety not volume). If Costco tried to stock the variety of items you find in a Walmart Super Store, it wouldn't be as profitable per dollar of sale (and wopuldn't have the margin to support the higher wages).

[GoldenMean]

16. Walmart is bad

But they don't charge $55 a year to just get in the door.
Costco makes $2.4 billion a year in membership fees.
I shop at both Walmart and Costco because I have to make every penny count
Sorry, if I had more money I could be more selective in where I spend money.
Walmart did just raise their wages from $9 to $10, so they are feeling the Bern

[SunSeeker]

17. The drawback at Costco is the long lines...because everyone wants to shop there! nt

[KamaAina]

19. And the huge quantities and outlying locations.

Fine if you have a car. Transit-dependent? Not so much.

[SunSeeker]

23. True. My closets are full of huge packs of Costco paper towels, tissue , etc. nt.

[Yo_Mama]

30. You need a car, money, and space to store the stuff.

I understand one can save money there, but a lot of people buy just what they need to get by every month, and can't afford to "stock up".

[cannabis_flower]

38. In Houston

there is one inside the loop.

[KamaAina]

42. For all of Houston?

See what I mean?

[cannabis_flower]

45. No, of course not

Just in Houston there is one close to inner city. There is also one on I-10 and Bunker Hill, one in Sugarland, one in Katy and one at Willowbrook

[KamaAina]

46. But the area inside the Loop is YUGE!

Most folks wouldn't be near it.

P.S. Many Houstonians, especially the UT grads among them, refer to the Loop as the "Aggie evacuation route".

[cannabis_flower]

47. How big is Yuge?

I went to google maps and it is 15 miles from on I-10 from the West Loop to the East Loop. Or are you talking about the Beltway.

[KamaAina]

49. That's pretty yuge.

Especially without a car. I understand Houston is making some strides in transit, now that Bug Man DeLay is not there to lobby against projects in his own district (!!), but it'll take a while to get even where Dallas is today.

[cannabis_flower]

48. Oh and

it's on the bus route. And buses in Houston have bike racks now. And it isn't really close to the loop either, it's about 2 or 3 miles from the West Loop.

[TexasBushwhacker]

50. They're opening one in Humble in March n/t

[GoldenMean]

22. Best deal at Costco

Three lb. roasted whole chicken for $4.99
Costco loses $40 million a year selling them at this price
Whenever we go we make sure we get one.
You can't beat their $1.50 Kosher dogs either
I once as a joke took my wife out to dinner at Costco and and just walked around eating the free samples.

[Z_California]

40. The $1.50 dog comes with a drink too!

My son has worked at Costco for four years. They are a great employer!

[closeupready]

41. Agree. Also, their Kirkland chicken stock.

Good enough to have on its own, so full of flavor. Also the french onion soup, canned tuna/salmon, personal hygiene products like deodorant, razors, and shampoo, socks, undershorts, gym shoes, coffee beans ... No end to the great deals to be had.

[Liberal Veteran]

43. Rotisserie chicken from Costco is the devil.

Moist delicious affordable devil.

Even if I have eaten nothing but chicken for a week, I always buy one as I am getting ready to head for the check out because they are that good.

[Enthusiast]

25. Kicked and recommended! Thank you, KamaAina!

[snort]

26. I knew it was Costco! Yay me! Do I win?

I shop at a gigantic Costco in Hillsboro OR and the employees all seem quite happy to be working there. If I was younger I'd put in an application myself.

[dreamnightwind]

32. Love them but they drug test employees

I wonder how that works i states where herb is legalized? Anyway I wish they would stop that practice.

[madinmaryland]

27. Aldi's is the same way.

My daughter has been there several months, and started at about the same wage listed above.

They actually have great prices, also. They basically sell their own store brand, and the quality is good! The only thing that lags is the produce, but with what you save, you can go to Kroger and get decent produce.

[KamaAina]

28. They're Trader Joe's parent company.

Hence the similarities, including the crappy produce.

[cannabis_flower]

39. Produce at Krogers is expensive

We have a grocery store here in Houston called Fiesta. It somewhat caters to the Hispanic community and has really good prices on produce and always has really good avocados. They are cheap on everything that Hispanic people buy - tomatoes, peppers, onions, beans, bananas, etc.

But Krogers has really good prices on frozen foods, particularly frozen vegetables. $1 for the 16 oz packages of frozen broccoli, brussels sprouts, okra and others.

[Nobel_Twaddle_III]

34. temporarily living in the seattle area I am surrounded by Costcos and have developed a habit.

[Liberal_in_LA]

35. Kick

🙆

[moondust]

44. Ya but...

how many multibillionaire megalomaniacs do they have on board? Huh? That's the real measure of laissez-faire success in laissez-faire 'Murca.

[Populist_Prole]

54. Don't laugh, but

OK, we really can laugh...

My father is a hard-ass TP conservative. He's befuddled by cognitive dissonance though:

There's a Costco really close to him, and a Walmart just a bit farther. He really likes Costco as a store, and throws them a ton of business. But he always grouses "But they're kinda' left wing". He doesn't like Walmart except to buy hunting/fishing licenses...but he always comes to their defense whenever complaints are aired about their employee relations. He likes their business model but he dislikes the store.

Now THAT is a working definition of a true ideologue.

[moondust]

55. I believe it.

I sometimes find myself noting which companies tend to screw their workers and engage in other objectionable practices and I tend to steer clear of them when there's an alternative. Like a lot of other people, I never buy products like Brawny paper towels that I know are made by companies owned by the Koch brothers.

Go ahead, call me an ideologue!

[oldandhappy]

51. Good job, Costco. I shop Costco.