Wal-Mart is a favorite of Wall Street. Analysts like the way the company mercilessly drives down operating expenses in order to return greater shareholder value. The folks over at TomPaine.com and a few others, however, have begun suggesting that the Costco model (which sees employees paid a living wage, provided benefits, etc) may be the more profitable in the long run. The fantastic success of Wall Mart, they argue, is merely a myth. Heres a clip from the article:
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 featpreferring 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) to Sam’s Club.
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.
While were on the subject of getting screwed, heres an interesting little article on a old woman that was the recipient of some excessive force at the hands of the Portland, Oregon police department. Heres a quote:
She was 71 years old.
She was blind.
She needed her 94-year-old mother to come to her rescue.
And in the middle of the dogfight — in which Eunice Crowder was pepper-sprayed, Tasered and knocked to the ground by Portland’s courageous men in blue — the poor woman’s fake right eye popped out of its socket and was bouncing around in the dirt.
And I ask you, how could I not post that?
And, before you write me note about how this elderly blind woman probably deserved it, heres one last link. This one will take you to a story about the 328 prisoners who have been exonerated since mid 80s because of DNA evidence.
Speaking of angry letters, I just got this one today in reference to my post last night on the subject of donating to the Kerry campaign instead of sending Linette and me baby gifts when our new kid is born. It comes from a man named Mr. Nelson.
If Kerry does get elected, as you hope, you should have more pictures of war to link to your site. Only, I’m afraid, they will be pictures of Americans blown up in this country. Please let me know if people do donate in your name, so I can donate an equal amount to the RNC.
Best Regards
I just wrote back what I think was a nice note, explaining to him why I didnt think that a vote for Kerry would make us any less safe in the United States, and a bunch of other stuff And now Im pissed at myself. Ive been getting tons of good mail lately, mail that I really want to answer, and yet I spend my time replying to things like this. My priorities are all fucked up. Im more interested in proving to him that I know what Im talking about than I am maintaining friendships with people I genuinely like.
So, if I havent answered that letter you sent a few weeks ago yet, just send me a reminder, along with a sentence or two about bodies piling up in the streets. Thatll get you to the front of the cue.
And here, lastly, is something that they Ypsites in the audience might enjoy, a statistical profile of our hometown. Its pretty cool, and you can even submit photos Speaking of which, Ive got a great one of the old Ypsi-Ann Interurban (a train that used to run through Ypsi about a century ago) tracks that were recently discovered beneath the street in front of our local strip club I like the way history and lap dances collide Who would have thought?
