make the costco jump

I know we’ve talked about the differences between the Costco and Wal-Mart business practices in the past and I’ve linked to articles on the subject, but I think I’ve yet to see an analysis as comprehensive as this one by Moira Herbst entitled, The Costco Challenge: An Alternative to Wal-Martization? Here’s how it begins:

Critics believe that Wal-Mart should play the role General Motors played after World War II… [and] establish the post-world-war middle class that the country is so proud of. The facts are that retailing doesn’t perform that role in the economy. Retailing doesn’t perform that role in any country.
–Wal-Mart CEO Lee Scott, April 2005

To workers and union leaders, it is a familiar refrain. These days, the story goes, consumers demand low prices, meaning goods must be produced and sold cheaply — and retail wages must be kept as low as possible. Companies like Wal-Mart insist they’re feeling the squeeze and must pay workers poverty wages — even while netting $10.5 billion in annual profits and awarding millions to top executives.

But there’s another company that is breaking the Wal-Mart mold: Costco Wholesale Corp., now the fifth-largest retailer in the U.S. While Wal-Mart pays an average of $9.68 an hour, the average hourly wage of employees of the Issaquah, Wash.-based warehouse club operator is $16. After three years a typical full-time Costco worker makes about $42,000, and the company foots 92% of its workers’ health insurance tab…

The more you read, the more it becomes clear that there’s really no comparison… Take, for instance, this fact: The CEO of Wal-Mart in 2004 made $5.3 million (salary + bonus), while the CEO of Costco took home $350,000… That, I think, speaks volumes about the companies and their core values. Wal-Mart pays below poverty-level wages to its “associates,” encourages them to seek out government assistance to make ends meet, and then rewards its CEO with over $5 million a year. Costco, on the other hand, strives not only to provide shareholder value, but also stakeholder value across the board, from the corporate suite to the warehouse floor. Whereas Wal-Mart depends on the constant churn of new, low-wage labor, Costco has followed a different, more sustainable, path.

Someone, or some group, really needs to put some money behind this information and make it known to the men and women of America. We need a national advertising push for people to support their fellow citizens and “Switch to Costco.”

“You can get inexpensive toilet paper at one of two places. One pays its employees a living wage. One does not. Which do you choose?”

Of course, I’d rather see people supporting smaller, locally-owned stores, but the reality of the situation is that Americans want the cost-savings afforded by companies such as these… The least we can do is help them see that their decision between the two has consequences.

While we’re on the subject of Wal-Mart, here’s a note from American Rights at Work:


When Wal-Mart employees in Jacksonville, Texas, tried to form a union in their meat-cutting department, Wal-Mart responded by eliminating meat cutting in every single store.

Workers at a Wal-Mart store in Jonquiere, Quebec, successfully formed a union. But rather than negotiate with the employees for better wages and health care, Wal-Mart shut down the entire store.

When Wal-Mart employees try to form a union, they face threats, intimidation, and even firings.

Tell Wal-Mart enough is enough.

Sign the petition.

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10 Comments

  1. Lori Impersonator
    Posted July 14, 2005 at 3:07 pm | Permalink

    The ALF-CIO has something on-line that you might be interested in:

    http://www.aflcio.com/corporateamerica/walmart/index.cfm

  2. Posted July 15, 2005 at 6:45 am | Permalink

    I signed it, Mark, but I can’t believe Wal-Mart gives two figs. And I’ve seen the Costco vs. Wal-Mart comparison before about living wage vs. non-living wage. I don’t shop at either as W-M is evil and there isn’t a Costco anywhere near me, but I feel I should get a membership to Costco just to show support.

  3. john galt
    Posted July 15, 2005 at 8:54 pm | Permalink

    Costco Roxxors!! I never get out of there for less than 300.00. The employees care and you can eat lunch for about 2.50. (unless you gorge on samples)

  4. mark
    Posted July 16, 2005 at 1:43 pm | Permalink

    Cool site, person pretending to be Lori… Kathleen, I don’t know that it warrants joining just to show support, but if you are planning to join a warehouse club, I’d suggest you check them out. Linette and I go a few times a year for toilet paper, Morningstar Farms fake sausage, and gallon bottles of Bombay Saphire gin. There’s one about thirty miles or so away… And, John, I love it when we find things to argee on. If you were here, and if you were a real person, I’d hug you and pour you a drink.

  5. chris
    Posted July 16, 2005 at 5:22 pm | Permalink

    Wait a minute, Bombay SAPHIRE comes in gallon jugs!!!!

    Come to think of it I do need some more Q-tips (the organic ones I bought plastic shafts?!?!?). And a gross of those chocolate chip cookies that come in packets, and a diamond ring.

  6. mark
    Posted July 16, 2005 at 9:25 pm | Permalink

    Maybe it’s a liter, not a gallon… but it feels as heavy as a gallon of milk.

  7. mark
    Posted July 16, 2005 at 9:27 pm | Permalink

    It’s 1.75 liters. I just went into the kitchen and checked… If I have the time, I’ll see if I still have the receipt. As I recall, it was really expensive.

  8. chris
    Posted July 17, 2005 at 12:05 am | Permalink

    Mark, I am not questioning you on the actual volume. I am just nonplussed at the thought of buying in volume a product that I so thoroughly enjoy. I am quite sure that it is spendy given that it is top shelf but I am sure there is some saving. Why, even 50c is savings enough for an excuse to buy in bulk.

  9. john galt
    Posted July 17, 2005 at 10:32 am | Permalink

    For the most part you save money at Costco, but be careful with the paper products (the 40 roll toilet paper), if you check the price per roll you’re usually paying more than at the grocery store. But the Coffee Can’t be beat at 5.00 for 2lbs (its better than starbucks).. Also tools are usually a deal, the one I go to is next to Home Depot and I always check costco first. I don’t even understand why people go to Wallmart. I hate that place, they consitently only sell low quality crap and the people and the ambiance reminds me of a VA hospital. Target on the other hand..

  10. john galt
    Posted July 17, 2005 at 11:26 am | Permalink

    because I had to look it up

    1 U.S. gallon = 0.84 imperial gallon =3.8 liters

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