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This past weekend, I went with my husband to shop at Costco to stock up on household supplies, and to save money on our grocery bills since we are expecting our first child in March. We saved money on protein, and got our freezer stocked for the month with it. While we were there, the store was busy. The employees were helpful, kind, and one of them helped me load the groceries to be checked out at the cash register when my husband ran into the back of the store to pick up an item he'd wanted to get.

I looked around, and I saw what a high-performing wholesale store looks like with well-paid employees that have access to health care insurance. It didn't look like Costco was going out of business. There were no employees standing around, looking beaten and worn down. The cashiers didn't have the vacant, thousand-yard stare look that I often see on cashiers at Wal-Mart and other big box retailers.

Costco has been breaking the mold for many years, and flouting the myth pushed by short-term thinking on Wall Street that labor costs should be reduced to have high profit margins, as this article below shows:

The results: happy employees, enviable stock performance and a brilliant shopping model that, let’s face it, bludgeons consumers into shopping happily for more.

So what makes Costco so successful? Arguably the biggest difference is how the retailer treats its workers. Walk into any Costco and look at the name tags. Chances are you will read the phrases “since 2002,” “since 1999” and “since 1995.” Costco workers get paid very well compared to their counterparts at chains including Walmart. In fact, employees working on the floor can make a salary that reaches the mid-$40,000 range; not bad for someone who starts working for the company out of high school. And while the vast majority of Costco’s employees are not unionized (most of those are legacy employees from Price Club that the Teamsters represent), over 80 percent have competitively priced health insurance plans. The outcome includes more productive workers, lower turnover and for what it’s worth, relatively high job satisfaction.

....

Meanwhile the stock has performed well, sliding only when the rest of the economy took a dive during the post 9/11 aftershock and the 2008 fiscal crisis. If you bought Costco stock a decade ago, your investment has roughly tripled in value.

For all the talk on here about the "skills gap" and the "employer gap," Costco has been one of the major leaders in corporate social responsibility, and fair treatment of its workers. They get that happy, well-paid workers are more productive workers, and that they contribute more back to the economy. It isn't a new idea, but one that has been built upon the original idea by Henry Ford who decided to pay his workers more so that they could buy his products:
“There is one rule for the industrialist and that is: Make the best quality of goods possible at the lowest cost possible, paying the highest wages possible.” Henry Ford
Now, imagine if Wal-Mart followed the example of Costco. What would be the effect on the economy if Wal-Mart raised their wages for their employees? As this study by the Center for Labor Research and Education at the University of California at Berkeley shows, it would be a major overall positive impact on the economy, especially on the workers at Wal-Mart.
Our data suggests that a $12 per hour minimum wage standard at Walmart would be effective in aiding lower-income families. If Walmart increased its minimum wage to $12 per hour, 41.4 percent of the income gain would accrue to workers with wages below 200 percent FPL. These low-wage workers could expect to earn an additional $1,670 to $6,500 a year in income.

If Walmart passed on 100 percent of the wage increase to consumers through price increases, which is unlikely, the impact for the average Walmart shopper would be $12.49 a year (Table 6, page 8). We estimate that 28.1 percent of the impact of the price increase would be borne by shoppers with incomes below 200 percent FPL.

Imagine the effect it would have on low-income employees at Wal-Mart. Parents of little girls like Alyssa in this photo essay from Mother Jones could actually afford to fix up their place or get a trailer, and provide a safer place for their daughter to live.

But instead, we live in a topsy-turvsy world where big box retailers like Costco are the exception rather than the norm. And politicians are too reticent to call for an increase in the minimum wage, or to offer any new incentives to get employers to increase the wages of their employees.

After all, it's far too easy to blame it on a "skills gap" problem, and to blame it on the employees for not being educated enough, or not having the skills necessary for the millions of jobs available. Never mind the fact that when these potential employees actually train for the jobs, and apply, they're rejected because they don't want to work minimum wage and actually expect to be paid well for what they've learned and worked hard in school for.

The one thing that we can do right now as consumers is to support retailers that do well by their employees and actually practice a good corporate social responsibility model towards their workers. I'll continue shopping at Costco as long as they continue to treat their employees well.

Originally posted to slinkerwink on Mon Nov 26, 2012 at 11:24 AM PST.

Also republished by The Democratic Wing of the Democratic Party, ClassWarfare Newsletter: WallStreet VS Working Class Global Occupy movement, Progressive Policy Zone, and In Support of Labor and Unions.

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