You should check out this article about Costco for prime evidence of how stupid and anti-worker Wall Street has become. Costco has been able to provide goods at low prices to consumers, while at the same time not treating its employees like indentured servants (ie. Walmart). A radical concept, and Wall Street isn’t amused.
Some Wall Street analysts assert that Mr. Sinegal is overly generous not only to Costco’s customers but to its workers as well.
Costco’s average pay, for example, is $17 an hour, 42 percent higher than its fiercest rival, Sam’s Club. And Costco’s health plan makes those at many other retailers look Scroogish. One analyst, Bill Dreher of Deutsche Bank, complained last year that at Costco “it’s better to be an employee or a customer than a shareholder.”
Mr. Sinegal begs to differ. He rejects Wall Street’s assumption that to succeed in discount retailing, companies must pay poorly and skimp on benefits, or must ratchet up prices to meet Wall Street’s profit demands.
Good wages and benefits are why Costco has extremely low rates of turnover and theft by employees, he said. And Costco’s customers, who are more affluent than other warehouse store shoppers, stay loyal because they like that low prices do not come at the workers’ expense. “This is not altruistic,” he said. “This is good business.”
These guys couldn’t write better satire if they tried. Wall Street analysts say CostCo’s too generous to its employees? Aren’t these guys the same ones who fire their CEOs and then pay them $130 million?
How stupid and anti-worker Wall Street has become … while it is debatable whether or not that is true, more importantly, it is utterly irrelevant. Wall Street is all about the performance of the stocks, period, end of story.
Wow, an average pay of $17 an hour? Surely, that includes management, but still. I thought I was doing pretty well. I can quit my job and go work at Costco for more money.
The last remark about alturism vs business sums up what I learned in an intro business course, basically that altruism has no place in business. It’s not charity. Obviously Sinegal sees that treating workers well makes those workers happier than their counterparts at other stores, which translates into better customer service and employees that actually give a damn.
People that I know with families LOVE Costco and rave about their helpful employees.
Sam’s? Walmart? Well, it’s cheap, that’s all they’ll say.
Viewing employees as assets rather than expenses. Viewing customers as people looking for a good deal rather than a revenue source to extract money from.
What a concept!
Nice to see their share price doing well.
Which is why we need strong laws to enforce a living wage for workers. The last 35 years, American workers have been losing ground, and now we don’t even have the highest standard of living in the world.
This is because the electorate votes for people that pander to corporations at the expense of the worker.
First, the campaign finance system needs to be reformed, to take away the influence that corporations have over policy.
Second, some real progressives need to be elected, who can bring issues like living wages, union protection, pension guarantees, and socialized healthcare into the public debate.
The modern Democrat has been no alternative to the Republicans when it comes to these issues, so the debate turns to wedge issues, like abortion and gay marriage, which are really not anything government should involve themselves in.
I think most liberals would LOVE to talk about living wage legislation, but they won’t get campaign financing if they do. And the self-financed candidates are too wealthy to understand the poor, for the most part.
It kills me when some Walmart employee making $6/hr, who can’t afford healthcare, votes for some NeoCon because they don’t want gay people to get married. Seems to me we should be offering them a real alternative.
Well, not quite the end of the story, JD. Wall Street is all about the future performance of corporations. When investors buy shares, they’re buying a portion of the corporation’s future earnings and dividends. If investors think a company’s future earnings are going to grow rapidly, they’ll pay more for a stock. If they believe the company’s earnings are going to grow slowly or even decline, they’ll pay less.
As it happens, the management of Costco has a theory of how to make the company’s earnings grow more quickly. Wall Street analysts like the one quoted in the story, think this theory is wrong.
Wall Street investors see it differently:
I am probably going to buy ~$2000 worth of Costco stock today. I’ve been doing research on these guys, and this is definitely a company that can be filed under “profitable” and “ethical.” I like to support those companies, both with my consumer and investor dollars.
I bought ~$2000 worth of Costco stock over the weekend. But that’s okay, they’ll simply restock the shelves.
I file them under “ethical” and “tasty”.
If you read the article OW linked, you see that the CEO pulls a salary of $350,000. I wonder why the market analysts don’t have anything to say about that.
I like Costco. And agree they seem to be a worker friendly business that others could learn from. I have been an executive member for years, but you are misleading things a bit when you talk about providing goods at lower prices. They are not similar to and do not sell things as cheaply as Wal Mart or Target. They generally sell bulk items of good quality at a good price – for high quality items in bulk, that is. You can’t go to Costco and get a can of beans or a lb of hamburger.
Dugger
I’ve considered it before, but I will now switch my Sam’s Club membership to Costco. I have to drive a little further for Costco but I’m sick and tired of not putting my money where my mouth is. Also, I used to go to Costco in Virginia and I loved it.
Actually, the comparison to Wal-Mart is valid because Wal-Mart runs Sam’s Club, one of Costco’s competitors.
Costo Hates Wal-Mart
Via Oliver Willis: In this article from the NYT’s, Jim Sinegal, the chief executive of Costo Wholesale asserts that;Good wages and benefits are why Costco has extremely low rates of turnover and theft by employees, he said. And Costco s customers,
Beans? Hamburger?
I would’ve guessed a military pension would let you eat a little better, Dug.
Dugger, people were comparing them to Sam’s Club, which is Wal-mart’s version of Costco.
I was already aware of how much better Costco treats it’s employees, and many of us shop there for that reason. But their stores are cleaner, classier and the workers there seem to be genuinely content in their work and therefore, the service and overall atmosphere is better. I went into a Wal-Mart once and will never return. It was truly scary.
The fact that Wall Street believes that a company can only be considered successful if it screws it’s workers is typical of the utter contempt that corporate america holds for the people who actually do the work and generate their profits.
Quaker,
Roun’ these here parts, poor folks shop at Wal mart. Wealthy but frugal Republicans like myself, shop at Costco. And some military can retire at 20 years at about half salary – which isn’t much but is good for only 20. I didn’t.
Pionar,
Point taken.
$17 an hour.
I’m switching jobs. Let someone else wait tables for utter pricks.
(I’m not bitter.)
Who’s talking shit about Target?
Costco strongly supports the Deomcrats, Sam’s strongly support the Republicans – it’s all over the net. Interesting.
As for Target, they have a distribution center here in WI – nothing to brag about.