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Thread: Costco's Profit Soars To $459 Million As Low-Wage Competitors Struggle

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    Re: Costco's Profit Soars To $459 Million As Low-Wage Competitors Struggle

    Quote Originally Posted by specklebang View Post
    I was a high wage employer. The cost of training a new employee exceeds the value of keeping experienced employees not to mention that when you come to the office, your employees love you.
    Good point. It was argued a little more analytically in Harvard Business Review:

    (L)etís assume that the total cost of replacing an hourly employee at Costco or Samís Club is only 60% of his or her annual salary. If a Costco employee quits, the cost of replacing him or her is therefore $21,216. If a Samís Club employee leaves, the cost is $12,617. At first glance, it may seem that the low-wage approach at Samís Club would result in lower turnover costs. But if its turnover rate is the same as Wal-Martís, Samís Club loses more than twice as many people as Costco does: 44% versus 17%. By this calculation, the total annual cost to Costco of employee churn is $244 million, whereas the total annual cost to Samís Club is $612 million. Thatís $5,274 per Samís Club employee, versus $3,628 per Costco employee.

    The High Cost of Low Wages - Harvard Business Review
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    Re: Costco's Profit Soars To $459 Million As Low-Wage Competitors Struggle

    Quote Originally Posted by MaggieD View Post
    Good find, Ahlevah. I don't think anyone caught it but you. I'm amazed it wasn't mentioned in the OP article.

    As to the $45K number bandied about, that number includes all employees of Costco, from the CEO on down. Check Glass Door for rank-and-file averages. The OP article is somewhat misleading. Just by way of interest, I checked the CEOs salary. It's $350K a year. Surprisingly low. With his other compensation, though, he earned over $2 million. That's better.
    The vast bulk of Costco is not unionized.
    Quote Originally Posted by Moderate Right View Post
    The sad fact is that having a pedophile win is better than having a Democrat in office. I'm all for a solution where a Republican gets in that isn't Moore.

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    Re: Costco's Profit Soars To $459 Million As Low-Wage Competitors Struggle

    We have one Costco in Houston that I know of, everything else is WallMart.

    I know Wall-Mart treats their employees well, considering many of the in store positions require no higher ducation or long term training.

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    Re: Costco's Profit Soars To $459 Million As Low-Wage Competitors Struggle

    Quote Originally Posted by poweRob View Post
    The vast bulk of Costco is not unionized.
    Fair enough. I find it interesting that the company bases its company-wide employee compensation packages on the collective bargaining agreements it negotiates on a three-year cycle. Presumably, this comes from Costco management's conclusion that this makes good business sense by reducing employee turnover and theft. (After all, if workers love you, or at least like you, they're less likely to leave or steal from you.) Paying a higher wage would also, I think, help keep meddling unions at bay. That probably figures into management's calculus somewhere.
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    Re: Costco's Profit Soars To $459 Million As Low-Wage Competitors Struggle

    Why are more and more Corporations forgetting this? They're getting rich now but they're stabbing the future in the back (pun inadvertent).



    Quote Originally Posted by Ahlevah View Post
    Good point. It was argued a little more analytically in Harvard Business Review:

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    Re: Costco's Profit Soars To $459 Million As Low-Wage Competitors Struggle

    Quote Originally Posted by azgreg View Post
    I think it shows that if a company takes care of it's employees their moral is higher and they are more productive. Too bad more companies don't recognize this.
    Agreed. Fortunately, so long as we maintain capitalism, competition between firms will result in those more productive, more successful firms beating out their competition, and replacing them.

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    Re: Costco's Profit Soars To $459 Million As Low-Wage Competitors Struggle

    Quote Originally Posted by cpwill View Post
    Agreed. Fortunately, so long as we maintain capitalism, competition between firms will result in those more productive, more successful firms beating out their competition, and replacing them.
    "Maintain capitalism"? The current system we have in place, where the government subsidizes Walmart employees' inadequate wages with welfare and medicaid, is most definitely NOT capitalism. Its ****ty socialism.

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    Re: Costco's Profit Soars To $459 Million As Low-Wage Competitors Struggle

    Quote Originally Posted by ChunkySalsa View Post
    "Maintain capitalism"? The current system we have in place, where the government subsidizes Walmart employees' inadequate wages with welfare and medicaid, is most definitely NOT capitalism. Its ****ty socialism.
    I don't see a particular reason why the existence of a social safety net needs to be incompatible with free market competition.

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    Re: Costco's Profit Soars To $459 Million As Low-Wage Competitors Struggle

    Quote Originally Posted by haymarket View Post
    I know these people. The owner of one station admits that all three keep their prices the same so that they all make money. He says that the occasional past price wars are simply destructive and cause nobody to make money.

    This is the real world and not the abstract world of economic 101 theory. This is how it really works out there.
    And yet you can go places and see different gas prices on every corner. Go figure.
    There is only one basic human right, the right to do as you damn well please. And with it comes the only basic human duty, the duty to take the consequences.
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    Re: Costco's Profit Soars To $459 Million As Low-Wage Competitors Struggle

    Quote Originally Posted by Ahlevah View Post
    Fair enough. I find it interesting that the company bases its company-wide employee compensation packages on the collective bargaining agreements it negotiates on a three-year cycle. Presumably, this comes from Costco management's conclusion that this makes good business sense by reducing employee turnover and theft. (After all, if workers love you, or at least like you, they're less likely to leave or steal from you.) Paying a higher wage would also, I think, help keep meddling unions at bay. That probably figures into management's calculus somewhere.
    I've stated this earlier in the thread but the boss at Costco has said before that that's exactly why he pays his employees so well. Wall Street gives him loads of crap for doing it but his retort is, (paraphrased) "I don't have the shrink loss my competitors do and I don't have the turnover and training costs that my competitors do."
    Quote Originally Posted by Moderate Right View Post
    The sad fact is that having a pedophile win is better than having a Democrat in office. I'm all for a solution where a Republican gets in that isn't Moore.

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