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From Bush v Kerry to Costco v WalMart

I found this article to be interesting. Here is a portion of it:

Quote:

Issaquah, Wash.-based Costco offers comprehensive health insurance to most of its 78,000 US employees, making it eligible for Kerry's plan, said Kerry's top domestic policy adviser, Sarah Bianchi, 31. That may cut 10 percent, or $35 million, off its annual healthcare premiums.

Wal-Mart's health plan for its 1.3 million US workers is probably not broad enough to qualify for the savings that Kerry's proposal would bring, since it doesn't cover enough workers, said Jason Furman, 33, the Democrat's chief economic policy adviser. Fewer than half of Wal-Mart's employees are enrolled in the company health plan, according to figures supplied by the retailer.

Costco wouldn't have to raise salaries with Kerry's proposal to increase the minimum wage to $7 an hour, from $5.15 now. It already pays hot-dog vendors as much as $16 an hour, and the lowest wage it pays is $10 an hour. That's higher than the $9.96 average wage paid at discount stores bearing the Wal-Mart name.

It's funny that I can say this, but I actually am a former WalMart employee. My first official job was working for Pace, a competitor of Costco (then Price Club). Pace was bought out by WalMart and then became Sam's Club.

On the surface, not much changed, we gradually expanded our merchandise to include more things offered at Price Club. The real changes were between the lines. There was more corporate BS involved. Before each day they wanted the employees to start a cheer before we opened and there was a lot of corporate pride BS floating around. The crap they were flinging sickened me but the worker responses were worse. Almost everyone bought into it.

Another issue was hair length and earrings for men. At first they tried to make men with long hair cut their hair and stop wearing earrings. Luckily the small minority of affected workers fought back and were able to keep their hair and earrings.

My problem was with worker scheduling and out times. The store closed at 9:00 on weekdays, we were scheduled to leave at 9:30. As a cashier, I counted out my drawer, cleaned up the front end and left. Later we got a hotshot young manager who had us start to straighten up the asiles before we left. We'd work until 9:30 usually and go home, sometimes a little longer.

I noticed that when hotshot was there, we'd progressively stay later and later. Eventually it was at the point where we'd stay to between 10:00-10:30. Finally I was fed up with it and clocked out. As I left, hotshot confronted my friends and I and I had an arguement with him that 9:30 was our scheduled time out and since it was way past it I was leaving. Of course his response was you stay till we dismiss you. I simply countered that the employee handbook states that we are not to work past our scheduled out time. Grudgingly, he let us leave.

For the next few days or weeks (it was a while ago so I'm not sure on the specifics), we were promptly dismissed at our scheduled time. Eventually I was called into a meeting with hotshot and the GM. Expecting to be fired, I dragged myself into the office. Instead I learned that I was correct and the manager was violating policy. However, they created a loophole that out times for closing staff would be "cl" meaning closing time. Now they could keep us as long as they wanted to. I won, but I lost.

Eventually I was laid off after x-mas season with the temp staff they hired. I guess I was labeled a rabble-rouser and they took an easy way to get rid of me. This hadn't occurred to me until now, but our after hours work was probably so that they could take advantage of low-paid cashiers to do a good portion of the higher-paid stockers' work. Even when they company pays someone more, they find ways to limit their hours.

Nowdays, I shop at Costco and do my best to avoid WalMart companies at all costs.

Since you read my rant I'd like to include this from the end of the article:

Quote:

What makes the Wal-Mart and Costco rivalry stand out is that their political donations are so partisan and both companies are likely to gain if their party wins in November.

IRS disclosure records show that Sinegal and Costco chairman Jeffrey Brotman each gave $95,000 last December to the fund-raising arm of America Coming Together, a group organizing voters against Bush, and the Media Fund, which is running anti-Bush advertisements.

Wal-Mart's political action committee, the biggest company PAC, gave Republicans 81 percent of its $1.3 million in donations in the past two years, a higher proportion than any of the top 25 corporate PACs, according to PoliticalMoneyLine, a nonpartisan Washington-based group.

Sixty-seven percent of Wal-Mart's stores are in the 30 states that voted for Bush and Cheney in 2000, according to a comparison of store-location figures in the Wal-Mart 2003 annual report and election results. Costco's stores are mostly located on either coast, with 208 of its 321 stores in the higher-wage, more union-friendly 20 states that voted for Democrat Al Gore in 2000.

Sinegal makes no apologies for Costco's policies, saying higher wages reduce employee turnover, which lowers training costs. ''I'm not a social engineer," he said in an interview. ''Paying good wages is simply good business."

I love Costco.

I'd like to add something to my post. A typical arguement is that raising minimum wages and forcing benefits has to force companies to raise prices. Costco is an example of a company that offers benefits and has much higher than minimum wage. In fact, most people make at least twice the minimum wage. At the same time, their prices are just as good (or better) than Sam's Club's prices.

Interesting.

Quote:

Sixty-seven percent of Wal-Mart's stores are in the 30 states that voted for Bush and Cheney in 2000, according to a comparison of store-location figures in the Wal-Mart 2003 annual report and election results.

30 / 50 = 60%

While 67% > 60%, I really don't see the big deal in this number.

And yeah, I'm not fond of the Wal-Mart corporation... but shit, the university's free shuttle drops people off at two stops, and that's one of them.

If that's all you looked at then I think you missed the point of the article.

Re: From Bush v Kerry to Costco v WalMart

Quote:

Originally posted by kutulu
I love Costco.

Thanks for bringing this to my attention. I didn't know CostCo paid its workers such a high average. I'll make sure I frequent their stores more often.

I like to know that my money is handled well. If Costco is paying their employees well and giving them a good benefits plan it makes me want to shop there more.

My only problem with the place is that it's so hard to get out of there without spending $100...

Quote:

Originally posted by kutulu
I'd like to add something to my post. A typical arguement is that raising minimum wages and forcing benefits has to force companies to raise prices. Costco is an example of a company that offers benefits and has much higher than minimum wage. In fact, most people make at least twice the minimum wage. At the same time, their prices are just as good (or better) than Sam's Club's prices.

Interesting.

Yeah, it is interesting. I was reading about the phenomenon at inequality.org:

Quote:

[...]

The second nugget got far less attention, unless you're inclined to read the truly radical press: Business Week. In the April 12 issue, reporters Stanley Holmes and Wendy Zellner penned a terrific piece called "The Costco Way," with an even more provocative sub-title: "Higher wages mean higher profits. But try telling Wall Street." The authors point out that Costco recently posted a 25 percent profit gain, as well as a 14 percent sales hike. Yet Wall Street punished Costco's stock, driving it down 4 percent. What gives? As the authors report: "One problem for Wall Street is that Costco pays its workers much better than archrival Wal-Mart Stores Inc. does, and analysts worry that Costco's operating expenses could get out of hand. 'At Costco, it's better to be an employee or a customer than a shareholder,' says Deutsche Bank analyst Bill Dreher."

And there it is in a nutshell. In today's economy (or, for that matter, yesterday's economy), whether a company treats its workers fairly and satisfies consumers does not matter to Wall Street. Stock analysts don't reward such a feat--preferring instead that a company conform to Wall Street standards by wringing out every cent from regular people's wallets.

But the great piece of reporting (and public service) that Holmes and Zellner perform is that they actually run the numbers and get beyond the rhetoric. They compare Costco to Wal-Mart's Sam's Club, the unit with which it directly competes. Costco, which has about a 20 percent unionization rate, pays workers 40 percent more than Sam's Club and gives them comparatively superior benefits (for example, health care and profit-sharing plans).

Costco, surprise, has a lower turnover rate and a far higher rate of productivity: it almost equaled Sam's Club's annual sales last year with one-third fewer employees. Only six percent of Costco's employees leave each year, compared to 21 percent at Sam's. And, by every financial measurement, the company does better. Its operating income was higher than Sam's Club, as was operating profit per hourly employees, sales per square foot and even its labor and overhead costs. Here's a quote to emblazon for corporate America: "Paying your employees well is not only the right thing to do but it makes for good business," says Costco CEO James D. Sinegal.

It's one thing for wacky columnists to bemoan the Wal-Martization of America. But Wal-Mart cannot let stand a salvo from the mainstream business press. My suspicion is that Wal-Mart will do everything possible to discredit the authors, in a campaign that will make the White House's assault on Richard Clarke look mild by comparison. During the dreadful supermarket strike in Southern California, the big supermarkets said they had no choice but to demand draconian cuts from their 70,000 workers because of the competitive challenge posed by Wal-Mart and its lower prices. The radicals at Business Week explode that myth, encapsulated in the article's final sentence: "Costco shows that with enough smarts, companies can help consumers and workers alike."

Interesting indeed.

I generally have shopped at Costco anyways because I found their prices to be great and their quality to be better than Wal-Mart. I get more bang for the buck but wow, I didn't know they paid their workers so well too along with that.

And to be honest, I didn't even really care all too much between the politics of the two. I shopped Costco just 'cause it was better IMO.

There aren't too many alternatives to big box retailers anymore, so at least Costco represents an alternative to the cultural and economic ugliness of Wal-Mart. Let's still keep our purchases local when possible, of course.

Actually cthulu23 reminded me of something...

Last weekend I went up to Sacramento area with my dad during a trip to northern california

He had a chance to visit his old home, town, area, and college while up there...

One thing he noted was how many former local stores and companies - everything from hardware to groceries to food - had all become a part of the major corporations. Where there was once a lumber store had now been replaced by an ACE hardware down the store. Where there were once local restaurants, they were now fast-food chains.

Though it is indeed a part of capitalism, at times though, it is sad to see many local companies owned by local people being swallowed up by increasingly larger companies.

That is how I have been feeling about Wal-Mart and their plans for supermarkets and what not. I want competition among local groups, not big super conglomerates ruled by one company.

/rant off

Thanks for spreading the word about the differences between Costco and Walmart/Sams Club. It is amazing that Costco can support workers and provide health care and still make a profit. It seems that Walmart/Sams Club can only provide sub-par wages, and benefits, descriminate against women and the disabled and barely squeak out billion dollar profits. Man those Waltons have it hard.

Quote:

Originally posted by mml
It is amazing that Costco can support workers and provide health care and still make a profit.

I don't know about that. I think it is just a different approach. The truth about business is that there are numerous approaches that will work. Costco's is to better reward their workers and therefore inspire better performance and loyalty from them, thus improving their value. Wal-Mart's is to squeeze their employees for every dime and every minute of labor. Obviously, both can result in profit, and I think we can find examples of failures using either.

I think the Wal-Mart approach is the more obvious to management, while the Costco approach takes a bit more vision and understanding on the management's part.

Quote:

Originally posted by jb2000
I think the Wal-Mart approach is the more obvious to management, while the Costco approach takes a bit more vision and understanding on the management's part.

The question is; which is rewarded with jb2000's dollar? In my case, although I usually avoid Walmart like the plague, we have no Costco. Therefore, Walmart has only to compete with...what...K-mart, Target, Shopko, and very little else. Sam's Club? No competition...at all. Does Costco = Sam's Club, or Walmart?

Target.

Target runs it's business model just like Costco does.
Costco is to Sam's Club as Target is to Walmart.

I never Shop Wal Mart or Sam's Club. Just Target and BJ's because there are no Costco's here.

Targets prices are slightly higher than the Wal Mart, but the products are better quality as well. They keep their stores clean and it doesn't become a magnet for crime like all Wal Marts manage to be able to do.

Quote:

Originally posted by Superbelt
Target.

Target runs it's business model just like Costco does.
Costco is to Sam's Club as Target is to Walmart.

I never Shop Wal Mart or Sam's Club. Just Target and BJ's because there are no Costco's here.

Targets prices are slightly higher than the Wal Mart, but the products are better quality as well. They keep their stores clean and it doesn't become a magnet for crime like all Wal Marts manage to be able to do.

hey could we get some references on the target claim -- i'm always looking to support businesses (even large corporations) that strive to treat their worked well and i'd love to include target on my "good" list.

Target is so much better than walmart for all those reasons you listed. I'm glad to hear that they treat their workers well also.

Quote:

Originally posted by brianna
hey could we get some references on the target claim -- i'm always looking to support businesses (even large corporations) that strive to treat their worked well and i'd love to include target on my "good" list.

same here, superbelt. thanks.

Before I saw what was read in this thread I had never heard anything good or bad about target. I did a search and the first thing I saw was a testimonial from a disgruntled worker, some guy who after recieving two pay raises decided the managers wanted him out, therefore he quit. Not enough to draw any conclusion on.

The second was about some internet myths regarding their treament of veterans and contributions to veteran issues on snoops.com:

http://www.snopes.com/politics/military/target.asp

All in all, I'm not finding much about Target. Mostly anectdotal things on message boards and you can't put much stock in those things.

It's easy to find WalMart stuff but they are a huge target and everyone likes to overthrow the King. I have my personal experience with WalMart but that's just me. Maybe I was just a shitty worker, I don't know. I am biased because I had a personal stake in it.