Costco = Commie, or Just Good Business?

I’ve been reading for a few weeks that Costco’s average wage is $16 per hour. This seemed so counter-intuitive given the current retail climate (read: Walmart) that I pretty much ignored it. But I keep seeing this quoted, so now I’m paying attention.

Costco, “forced” by partial unionization to pay its workers almost double and provide a comprehensive benefits package, still out-performs Sam’s Club by every profitability metric (obviously not total profit given their size, but per-store, per-employee, stock price performance, etc.). Turns out if you pay more, you attract employees who work harder, treat customers better, and stick around. Who knew? Oh wait, pretty much everyone.

In fairness, I will say that Costco’s growth strategy is, so far, different from and more self-limiting than Sam’s Club’s. Unlike the carpet-bombing expansion the Walmart supply chain has allowed Sam’s to accomplish, Costco has cherry-picked the top high-profit suburban markets and–with a 50% higher membership fee–the top high-profit clientele for that matter.

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