Right to Work?

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AlyssaEimers's picture
Joined: 08/22/06
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Right to Work?

What exactly is Right to Work? I have seen signs and tons of posts on FB. I tried Googling it, but an everyday explanation would be great. Thanks.

mom3girls's picture
Joined: 01/09/07
Posts: 1533

It means you can work without joining a union.

GloriaInTX's picture
Joined: 07/29/08
Posts: 4111

Each state has different laws about whether you have the right to work without being mandated to join a union.

A Right to Work law secures the right of employees to decide for themselves whether or not to join or financially support a union. However, employees who work in the railway or airline industries are not protected by a Right to Work law, and employees who work on a federal enclave may not be.

Right to Work States | National Right to Work Legal Defense Foundation

AlyssaEimers's picture
Joined: 08/22/06
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What do you all think? Are you for or against it?

GloriaInTX's picture
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For. Absolutely. Unions have their place in history but in most cases they have done their job and are not needed anymore. No one should be forced to join a union to get a job. Especially if you feel the union doesn't represent your values and makes political contributions that you are forced to pay dues for that you don't agree with.

Union Facts: The Center for Union Facts

Rivergallery's picture
Joined: 05/23/03
Posts: 1301

Totally FOR, when I did work for a union I had no choice to pay dues, and those dues went to political advertising that I disagreed with, one should NOT have to join a union period.

Alissa_Sal's picture
Joined: 06/29/06
Posts: 6427

That's a hard one for me. I do think that unions still do good for their employees (although they certainly aren't perfect) and the strength of a union comes from the fact that all of the workers are unified. If you don't have to be in a union, the employer can ignore the "demands" of the union by simply all people who are willing to break with the union in order to get a job. Since I don't totally trust that most employers are benignly going along trying to do the rest best they can for their employees, I can certainly see why the union is needed, and why it's important not to break it, which is what you do if the employees are not mostly all unified.

On the other hand, it seems bad to make someone join something a pay dues if they truly don't want to.

So, I see both sides of the argument, and don't have an easy answer.

mom3girls's picture
Joined: 01/09/07
Posts: 1533

Nobody should ever be forced to join a union. Cannot think of a single good reason someone would be okay with forcing that on someone else

Joined: 03/14/09
Posts: 624

Funny how people say "you have the right to change jobs if you don't like the conditions" when the employers are treating you badly, but don't say it when the unions are improving the conditions.

AlyssaEimers's picture
Joined: 08/22/06
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I do not think you should be forced into a union and do not necessarily think they improve conditions. I do think that years ago they did a lot of good.

Rivergallery's picture
Joined: 05/23/03
Posts: 1301

Exactly Hostess employees would have still had jobs if the unions hadn't gotten in the way.. in fact it was two separate unions colliding and made a mess.

Joined: 04/12/03
Posts: 1683

I think there may be some confusion. I know with my union, you don't have to join; you can be a non-paying member. You benefit from the bargaining, but you have no protection. My aunt refused to join her entire career. Also, the political contributions can be opted out of. That money is donated to the charity of your choice.

SO and I were watching Bryant Gumble Real Sports last week. It was about football rules in the NCAA compared to the NFL. There are major issues with football players (and any other sport that takes hits to the head). They have lasting effects long after the initial hit.

post-concussion syndrome, depression, other mood disorders, personality changes, memory problems and dementia

Thanks to the collective bargaining of the NFL, many policies have changed and there is long-term medical benefits for players.

The NCAA doesn't have those protections. One of the college football players interviewed went from a Tier 1 school to flunking out of a Tier 3 school all due to the brain injuries sustained playing football.

It isn't just football. Another special I watched involved female teenage soccer players.

What is my point? If you compare the non-union players to the union players, the union protects their players.

Unions have done wonderful things over time. OSHA, min. wage, working conditions, child-labor laws. Ahh, that's a good one - child labor laws. Do you know in the entertainment industry how many laws regarding child labor would be ignored without studio teachers and OSHA? Right now in 2012.

Or how many bad calls in football without union refs...LOL

How about coal miners? When faced with being terminated over refusing to perform your in an unsafe manner, what do you do? With unions, workers in general are protected from having to make that choice.

Thus, i would have to say no, unions have not "served their purpose."

AlyssaEimers's picture
Joined: 08/22/06
Posts: 6560

It might depend on the State and the profession. My mom is a nurse in NY and she does not have a choice about being in a union and she does not have a choice about political contributions that she does not agree with.

I am sure there are situations where unions are still nice. It would be great if China got some unions. There are also situation where unions really hurt. When they demand pay or benefits that are truly unattainable for the company and force the company to close so all those employees lose their jobs.

boilermaker's picture
Joined: 08/21/02
Posts: 1984

I have a hard time defending corporations and profits. I have a really hard time defending how much money we are paying CEO's these days, as compared with the average employee.

CHART: Corporate Profits Skyrocket While Corporate Taxes Plummet | ThinkProgress

But I also have seen the "bad" side of unions. My father was a non-union employee at a steel mill and the unions helped drive them into bankruptcy (they had rules about working conditions that went a bit over the top, ie, if the elevator is broken you don't have to take the stairs to the 10th floor to work, but you will still get paid your wage-- so they would purposely break the elevator kind of thing.....)

I just wish more corporations had a conscience and paid their employees a living wage and protected their safety. No way do I think unions have totally "run their course" and have no role in our economy today. There is a reason Walmart really really tries to avoid having their employees unionize (and it is the same reason you and I are paying for healthcare for their employees and feeding Walmart employees kids' free lunches whilst the Walmart executives are banking top dollar.)

AlyssaEimers's picture
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Do you think Walmart would be able to compete if they paid their workers $30 an hour with benefits? (My educated guess to what you would have to make to not qualify for assistance programs). I do not believe that it is reasonable to think that all employees can pay their employees that much.

GloriaInTX's picture
Joined: 07/29/08
Posts: 4111

"boilermaker" wrote:

(and it is the same reason you and I are paying for healthcare for their employees and feeding Walmart employees kids' free lunches whilst the Walmart executives are banking top dollar.)

Because the executives went to college and worked to get an education so they could get a higher paying job?

Joined: 08/17/04
Posts: 2226

"AlyssaEimers" wrote:

Do you think Walmart would be able to compete if they paid their workers $30 an hour with benefits? (My educated guess to what you would have to make to not qualify for assistance programs). I do not believe that it is reasonable to think that all employees can pay their employees that much.

I don't make that much but I do get benefits and do not qualify for a single assistance program even with kids.

AlyssaEimers's picture
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Asking honestly - Do you know what it would be an hour? I am only using my personal experience of what DH made before and what he makes now. (We qualified for WIC before, but do not now)

Alissa_Sal's picture
Joined: 06/29/06
Posts: 6427

I read somewhere that the average Wal Mart worker makes $11.75 per hour (around $20,000 per year) which is below the living wage for a single parent family in many places. Many also don't receive healthcare benefits.

What is considered a living wage varies by region.

Living Wage Calculator - Introduction to the Living Wage Calculator

In my area, a 1 adult, 1 child family needs to make around $21 per hour to make a living wage. Anything below that and they will probably need to be on some sort of assistance because they can't pay the normal living expenses.

Lest you accuse our single mom of simply living above her means here, let me just say that from my POV the numbers they are using to calculate a living wage in my area are not at all extravagant. I looked at the "projected living expenses" for a person with one child in my area and they include paying around $650 a month in childcare (I have NO idea where you would get daycare that cheap - when mine goes full time I pay $900 a month, and that is pretty average from what I've found) and $357 a month for food (that's less than $100 a week) and around $900 a month for housing which would get you a very small apartment here.

No mention of the dreaded iPhones or cable TV, so I'm assuming they are either lumped into "Other" at $250 ish a month (for all of your other, including clothes, cleaning supplies and household goods, bills not lumped into "housing", et cetera) or forgotten. So basically, if a single adult with a single child was living an extremely frugal life in my area, she might be able to make it on $21 bucks an hour, otherwise she will probably need some form of assistance.

Which I guess is fine, if you don't think Wal Mart should have to pay their people more, but then it's like, don't complain that you have to help pay for this woman...she's working full time at a job that pays less than a living wage, and you approve of the company paying her that little, so something has got to give, and that something is most likely coming out of your paycheck. Wink

AlyssaEimers's picture
Joined: 08/22/06
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"Alissa_Sal" wrote:

I read somewhere that the average Wal Mart worker makes $11.75 per hour (around $20,000 per year) which is below the living wage for a single parent family in many places. Many also don't receive healthcare benefits.

What is considered a living wage varies by region.

Living Wage Calculator - Introduction to the Living Wage Calculator

In my area, a 1 adult, 1 child family needs to make around $21 per hour to make a living wage. Anything below that and they will probably need to be on some sort of assistance because they can't pay the normal living expenses.

Lest you accuse our single mom of simply living above her means here, let me just say that from my POV the numbers they are using to calculate a living wage in my area are not at all extravagant. I looked at the "projected living expenses" for a person with one child in my area and they include paying around $650 a month in childcare (I have NO idea where you would get daycare that cheap - when mine goes full time I pay $900 a month, and that is pretty average from what I've found) and $357 a month for food (that's less than $100 a week) and around $900 a month for housing which would get you a very small apartment here.

No mention of the dreaded iPhones or cable TV, so I'm assuming they are either lumped into "Other" at $250 ish a month (for all of your other, including clothes, cleaning supplies and household goods, bills not lumped into "housing", et cetera) or forgotten. So basically, if a single adult with a single child was living an extremely frugal life in my area, she might be able to make it on $21 bucks an hour, otherwise she will probably need some form of assistance.

Which I guess is fine, if you don't think Wal Mart should have to pay their people more, but then it's like, don't complain that you have to help pay for this woman...she's working full time at a job that pays less than a living wage, and you approve of the company paying her that little, so something has got to give, and that something is most likely coming out of your paycheck. Wink

$11.75 is far above the minimum wage. I do not think a retail company could afford to pay much more than that. Do you know of another retail company that pays its cashiers more than $21 an hour? Do you think Walmart could afford to pay its employees $21/hour while the store across the street pays its employees $8/hour?

Alissa_Sal's picture
Joined: 06/29/06
Posts: 6427

"AlyssaEimers" wrote:

$11.75 is far above the minimum wage. I do not think a retail company could afford to pay much more than that. Do you know of another retail company that pays its cashiers more than $21 an hour? Do you think Walmart could afford to pay its employees $21/hour while the store across the street pays its employees $8/hour?

Whether they can or can't afford to pay her more, my point is that they aren't paying her a living wage which means that (unless we approve of single parents and their children starving on the streets) someone is going to have to pick up the difference. If it's not Wal-Mart (who probably pay their C-Level around $6-$7MM per and also reported net earnings of $15.4B for the 2010 fiscal year -per Wiki, too lazy to keep digging for 2011) then it's going to be you and I. Unless we let her starve. I'm not in favor of letting working families starve to death or lose their (tiny $900) apartments if their companies pay them less than a living wage, but I realize some may disagree.

AlyssaEimers's picture
Joined: 08/22/06
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"Alissa_Sal" wrote:

Whether they can or can't afford to pay her more, my point is that they aren't paying her a living wage which means that (unless we approve of single parents and their children starving on the streets) someone is going to have to pick up the difference. If it's not Wal-Mart (who probably pay their C-Level around $6-$7MM per and also reported net earnings of $15.4B for the 2010 fiscal year -per Wiki, too lazy to keep digging for 2011) then it's going to be you and I. Unless we let her starve. I'm not in favor of letting working families starve to death or lose their (tiny $900) apartments if their companies pay them less than a living wage, but I realize some may disagree.

I do not think we should let them starve Smile I just do not think it is Walmart's responsibility to pay every single employee more than $21/hour.

Joined: 08/17/04
Posts: 2226

You don't think it is an employer's responsibility to pay their full time employees enough to function on their own without gov't assistance?

Alissa_Sal's picture
Joined: 06/29/06
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"AlyssaEimers" wrote:

I do not think we should let them starve Smile I just do not think it is Walmart's responsibility to pay every single employee more than $21/hour.

I don't know; it kind of seems like they have a non-working business plan to me. I mean sure, it works great for them. LOL Just not so great for their employees, and not so great for the rest of us. I mean, right now, they pay about half of a living wage, which means that we have to pick up the other half. In essence, we are in the position of having to possibly subsidize half of their employees' wages with government assistance to get them to a place where they can feed their families and live in some minimal amount of comfort.

Imagine if I came up with a business plan that said that in order for me to keep my prices low AND net huge profits (like 15.4B annually) I just wasn't going to pay my employees at all; the goverment would need to pay them the full amount they need to live. You'd probably laugh and say that my business model is ridiculous, right? But when it comes to mega-retailers like Wal-Mart, we're basically halfway there. I think it's kind of like the whole lobster pot scenario. I don't think that's how Wal-Mart started out, but over time as they and other stores continued to compete for lower prices and higher profits, their ability to pay a competitive living wages inched down over time, like turning up the heat on a lobster so he doesn't know it's getting hot until he's boiling.

Realistically, I don't know what we could really do about it at this point without a major shift in our culture, which is why I guess we keep doing nothing and just paying the difference so Wal-Mart employees can live while Wal-Mart nets (NETS - this is their revenue AFTER they pay their bills) all of those billions of dollars annually. To tie this back into unions, if there was a union at Wal-Mart they might be able to fight for higher wages so that we paid less to subsidize Wal-Mart employees. True, that would cut into Wal-Mart's profit margins, which means that in order to retain those profit margins they would have to raise prices. So it's kind of lose-lose, isn't it?

AlyssaEimers's picture
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"Jessica80" wrote:

You don't think it is an employer's responsibility to pay their full time employees enough to function on their own without gov't assistance?

You can not just single large retailers like Walmart out. You can not expect Walmart to pay their employees $21 dollars an hour, while everyone else pays their employees $8/ hour. Did you have an example of a store that paid their cashiers $21/hour? If you right now deemed that Walmart had to pay all of their employees $21/hour they would be out of business in a very short amount of time.

A business has expenses. The cost of making a product, the cost to ship and sell a product, and so on. If you were to raise salary of all retail workers to the currant cost of living, the price of the product would be so high that the cost of living would go up so they still would not be making cost of living.

If you want to make more than cost of living, go to college and get a good paying job, not retail.

AlyssaEimers's picture
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If you double Walmarts costs by increasing the pay of its cashiers by more than double, they will increase the cost of their goods by double so I would still be paying for that worker to have a living wage, the same as if that worker was on assistance. I think of Walmart as a job to gain experience and to learn from, not a job that someone should strive to work at their entire life.

If you paid an unskilled Walmart worker the same as someone who went to college for 4 years to get a good job, who would go to college? It would also bring the skilled pay workers pay down in comparison to the cost of things because the cost of necessities would go up so much.

Alissa_Sal's picture
Joined: 06/29/06
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"AlyssaEimers" wrote:

If you double Walmarts costs by increasing the pay of its cashiers by more than double, they will increase the cost of their goods by double so I would still be paying for that worker to have a living wage, the same as if that worker was on assistance. I think of Walmart as a job to gain experience and to learn from, not a job that someone should strive to work at their entire life.

If you paid an unskilled Walmart worker the same as someone who went to college for 4 years to get a good job, who would go to college? It would also bring the skilled pay workers pay down in comparison to the cost of things because the cost of necessities would go up so much.

*Someone* has to work at Wal-Mart, or else Wal-Mart would go out of business. They don't have enough CEOS and managers to man the stores without the "lowly" workers. I don't think it serves anyone to look down on people who are working there; if they didn't, no Wal-Mart.

I know this is blasphemy, but if we didn't think that corporations needed to maintain 15.4B annual profit margin, and were willing to raise the prices a bit, they might be able to pay a little bit more. That's what I'm saying about a cultural shift in attitude though. As long as we value dirt cheap prices and large corporate profits, we will continue to pay for it elsewhere. *shrug*

AlyssaEimers's picture
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"Alissa_Sal" wrote:

*Someone* has to work at Wal-Mart, or else Wal-Mart would go out of business. They don't have enough CEOS and managers to man the stores without the "lowly" workers. I don't think it serves anyone to look down on people who are working there; if they didn't, no Wal-Mart.

I know this is blasphemy, but if we didn't think that corporations needed to maintain 15.4B annual profit margin, and were willing to raise the prices a bit, they might be able to pay a little bit more. That's what I'm saying about a cultural shift in attitude though. As long as we value dirt cheap prices and large corporate profits, we will continue to pay for it elsewhere. *shrug*

I am not looking down on people that work at Walmart. I think it is a great place for people who are just starting out or are retired and want something a little extra. I do not think though, that you can expect to work at Walmart or any other retail store and expect to get rich. Nor can you expect Walmart to pay their employees double what their competitors do.

Joined: 08/17/04
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I wasn't specific to Walmart. I think all business should pay living wage. Living wage is the very minimum to survive without public assistance.

I didn't go to college for 4 years to make a living wage. I went to make a higher salary so I could buy my own home, have children, money to enjoy things like trips etc. Living wage covers food, rent in an affordable building not a luxury one etc.

Joined: 08/17/04
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DP

Alissa_Sal's picture
Joined: 06/29/06
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"AlyssaEimers" wrote:

You can not just single large retailers like Walmart out. You can not expect Walmart to pay their employees $21 dollars an hour, while everyone else pays their employees $8/ hour. Did you have an example of a store that paid their cashiers $21/hour? If you right now deemed that Walmart had to pay all of their employees $21/hour they would be out of business in a very short amount of time.

A business has expenses. The cost of making a product, the cost to ship and sell a product, and so on. If you were to raise salary of all retail workers to the currant cost of living, the price of the product would be so high that the cost of living would go up so they still would not be making cost of living.

If you want to make more than cost of living, go to college and get a good paying job, not retail.

Again, someone has to work these retail jobs, or else no more retail stores. Everyone always suggests "teens" as the answer to that; sure, if you don't mind your stores being closed during the day while most teens are in school, and closed again by 9 pm (in CO, all minors must be done working by 9:30, so that gives a half an hour to closing duties like cleaning the store and balancing the cash registers.) Anyone over 18 can be reasonably assumed to perhaps be supporting themselves and/or even children.

For an example of a store that pays better but still does well and has reasonable prices, how about Costco?

JIM SINEGAL, the chief executive of Costco Wholesale, the nation's fifth-largest retailer, had all the enthusiasm of an 8-year-old in a candy store as he tore open the container of one of his favorite new products: granola snack mix. "You got to try this; it's delicious," he said. "And just $9.99 for 38 ounces."

Some 60 feet away, inside Costco's cavernous warehouse store here in the company's hometown, Mr. Sinegal became positively exuberant about the 87-inch-long Natuzzi brown leather sofas. "This is just $799.99," he said. "It's terrific quality. Most other places you'd have to pay $1,500, even $2,000."

But the pi?ce de r?sistance, the item he most wanted to crow about, was Costco's private-label pinpoint cotton dress shirts.

"Look, these are just $12.99," he said, while lifting a crisp blue button-down. "At Nordstrom or Macy's, this is a $45, $50 shirt."
Combining high quality with stunningly low prices, the shirts appeal to upscale customers - and epitomize why some retail analysts say Mr. Sinegal just might be America's shrewdest merchant since Sam Walton.

But not everyone is happy with Costco's business strategy. Some Wall Street analysts assert that Mr. Sinegal is overly generous not only to Costco's customers but to its workers as well.

Costco's average pay, for example, is $17 an hour, 42 percent higher than its fiercest rival, Sam's Club. And Costco's health plan makes those at many other retailers look Scroogish. One analyst, Bill Dreher of Deutsche Bank, complained last year that at Costco "it's better to be an employee or a customer than a shareholder."

Mr. Sinegal begs to differ. He rejects Wall Street's assumption that to succeed in discount retailing, companies must pay poorly and skimp on benefits, or must ratchet up prices to meet Wall Street's profit demands.

Good wages and benefits are why Costco has extremely low rates of turnover and theft by employees, he said. And Costco's customers, who are more affluent than other warehouse store shoppers, stay loyal because they like that low prices do not come at the workers' expense. "This is not altruistic," he said. "This is good business."

He also dismisses calls to increase Costco's product markups. Mr. Sinegal, who has been in the retailing business for more than a half-century, said that heeding Wall Street's advice to raise some prices would bring Costco's downfall.

"When I started, Sears, Roebuck was the Costco of the country, but they allowed someone else to come in under them," he said. "We don't want to be one of the casualties. We don't want to turn around and say, 'We got so fancy we've raised our prices,' and all of a sudden a new competitor comes in and beats our prices."

At Costco, one of Mr. Sinegal's cardinal rules is that no branded item can be marked up by more than 14 percent, and no private-label item by more than 15 percent. In contrast, supermarkets generally mark up merchandise by 25 percent, and department stores by 50 percent or more.

"They could probably get more money for a lot of items they sell," said Ed Weller, a retailing analyst at ThinkEquity.
But Mr. Sinegal warned that if Costco increased markups to 16 or 18 percent, the company might slip down a dangerous slope and lose discipline in minimizing costs and prices.

Mr. Sinegal, whose father was a coal miner and steelworker, gave a simple explanation. "On Wall Street, they're in the business of making money between now and next Thursday," he said. "I don't say that with any bitterness, but we can't take that view. We want to build a company that will still be here 50 and 60 years from now."

IF shareholders mind Mr. Sinegal's philosophy, it is not obvious: Costco's stock price has risen more than 10 percent in the last 12 months, while Wal-Mart's has slipped 5 percent. Costco shares sell for almost 23 times expected earnings; at Wal-Mart the multiple is about 19.Mr. Dreher said Costco's share price was so high because so many people love the company. "It's a cult stock," he said.

Emme Kozloff, an analyst at Sanford C. Bernstein & Company, faulted Mr. Sinegal as being too generous to employees, noting that when analysts complained that Costco's workers were paying just 4 percent toward their health costs, he raised that percentage only to 8 percent, when the retail average is 25 percent.

"He has been too benevolent," she said. "He's right that a happy employee is a productive long-term employee, but he could force employees to pick up a little more of the burden."

Mr. Sinegal says he pays attention to analysts' advice because it enforces a healthy discipline, but he has largely shunned Wall Street pressure to be less generous to his workers.

"When Jim talks to us about setting wages and benefits, he doesn't want us to be better than everyone else, he wants us to be demonstrably better," said John Matthews, Costco's senior vice president for human resources.

With his ferocious attention to detail and price, Mr. Sinegal has made Costco the nation's leading warehouse retailer, with about half of the market, compared with 40 percent for the No. 2, Sam's Club. But Sam's is not a typical runner-up: it is part of the Wal-Mart empire, which, with $288 billion in sales last year, dwarfs Costco.

But it is the customer, more than the competition, that keeps Mr. Sinegal's attention. "We're very good merchants, and we offer value," he said. "The traditional retailer will say: 'I'm selling this for $10. I wonder whether I can get $10.50 or $11.' We say: 'We're selling it for $9. How do we get it down to $8?' We understand that our members don't come and shop with us because of the fancy window displays or the Santa Claus or the piano player. They come and shop with us because we offer great values."

Costco was founded with a single store in Seattle in 1983; it now has 457 stores, mostly in the United States, but also in Canada, Britain, South Korea, Taiwan and Japan. Wal-Mart, by contrast, had 642 Sam's Clubs in the United States and abroad as of Jan. 31.Costco's profit rose 22 percent last year, to $882 million, on sales of $47.1 billion. In the United States, its stores average $121 million in sales annually, far more than the $70 million for Sam's Clubs. And the average household income of Costco customers is $74,000 - with 31 percent earning over $100,000.

One reason the company has risen to the top and stayed there is that Mr. Sinegal relentlessly refines his model of the warehouse store - the bare-bones, cement-floor retailing space where shoppers pay a membership fee to choose from a limited number of products in large quantities at deep discounts. Costco has 44.6 million members, with households paying $45 a year and small businesses paying $100.

A typical Costco store stocks 4,000 types of items, including perhaps just four toothpaste brands, while a Wal-Mart typically stocks more than 100,000 types of items and may carry 60 sizes and brands of toothpastes. Narrowing the number of options increases the sales volume of each, allowing Costco to squeeze deeper and deeper bulk discounts from suppliers.

"He's a zealot on low prices," Ms. Kozloff said. "He's very reticent about finagling with his model."

Despite Costco's impressive record, Mr. Sinegal's salary is just $350,000, although he also received a $200,000 bonus last year. That puts him at less than 10 percent of many other chief executives, though Costco ranks 29th in revenue among all American companies.

"I've been very well rewarded," said Mr. Sinegal, who is worth more than $150 million thanks to his Costco stock holdings. "I just think that if you're going to try to run an organization that's very cost-conscious, then you can't have those disparities. Having an individual who is making 100 or 200 or 300 times more than the average person working on the floor is wrong."

There is little love lost between Wal-Mart and Costco. Wal-Mart, for example, boasts that its Sam's Club division has the lowest prices of any retailer. Mr. Sinegal emphatically dismissed that assertion with a one-word barnyard epithet. Sam's might make the case that its ketchup is cheaper than Costco's, he said, "but you can't compare Hunt's ketchup with Heinz ketchup."

Still, Costco is feeling the heat from Sam's Club. When Sam's began to pare prices aggressively several years ago, Costco had to shave its prices - and its already thin profit margins - ever further.

"Sam's Club has dramatically improved its operation and improved the quality of their merchandise," said Mr. Dreher, the Deutsche Bank analyst. "Using their buying power together with Wal-Mart's, it forces Costco to be very sharp on their prices."

Mr. Sinegal's elbows can be sharp as well. As most suppliers well know, his gruff charm is not what lets him sell goods at rock-bottom prices - it's his fearsome toughness, which he rarely shows in public. He often warns suppliers not to offer other retailers lower prices than Costco gets.

When a frozen-food supplier mistakenly sent Costco an invoice meant for Wal-Mart, he discovered that Wal-Mart was getting a better price. "We have not brought that supplier back," Mr. Sinegal said.

He has to be flinty, he said, because the competition is so fierce. "This is not the Little Sisters of the Poor," he said. "We have to be competitive in the toughest marketplace in the world against the biggest competitor in the world. We cannot afford to be timid."

Nor can he afford to let personal relationships get in his way. Tim Rose, Costco's senior vice president for food merchandising, recalled a time when Starbucks did not pass along savings from a drop in coffee bean prices. Though he is a friend of the Starbucks chairman, Howard Schultz, Mr. Sinegal warned he would remove Starbucks coffee from his stores unless it cut its prices.
Starbucks relented.

"Howard said, 'Who do you think you are? The price police?' " Mr. Rose recalled, adding that Mr. Sinegal replied emphatically that he was.

If Mr. Sinegal feels proprietary about warehouse stores, it is for good reason. He was present at the birth of the concept, in 1954. He was 18, a student at San Diego Community College, when a friend asked him to help unload mattresses for a month-old discount store called Fed-Mart.

What he thought would be a one-day job became a career. He rose to executive vice president for merchandising and became a prot?g? of Fed-Mart's chairman, Sol Price, who is credited with inventing the idea of high-volume warehouse stores that sell a limited number of products.

Mr. Price sold Fed-Mart to a German retailer in 1975 and was fired soon after. Mr. Sinegal then left and helped Mr. Price start a new warehouse company, Price Club. Its huge success led others to enter the business: Wal-Mart started Sam's Club, Zayre's started BJ's Wholesale Club and a Seattle entrepreneur tapped Mr. Sinegal to help him found Costco.

Costco has used Mr. Price's formula: sell a limited number of items, keep costs down, rely on high volume, pay workers well, have customers buy memberships and aim for upscale shoppers, especially small-business owners. In addition, don't advertise - that saves 2 percent a year in costs. Costco and Price Club merged in 1993.

"Jim has done a very good job in balancing the interests of the shareholders, the employees, the customers and the managers," said Mr. Price, now 89 and retired. "Most companies tilt too much one way or the other."

Mr. Sinegal, who is 69 but looks a decade younger, also delights in not tilting Costco too far into cheap merchandise, even at his warehouse stores. He loves the idea of the "treasure hunt" - occasional, temporary specials on exotic cheeses, Coach bags, plasma screen televisions, Waterford crystal, French wine and $5,000 necklaces - scattered among staples like toilet paper by the case and institutional-size jars of mayonnaise.

The treasure hunts, Mr. Sinegal says, create a sense of excitement and customer loyalty.

This knack for seeing things in a new way also explains Costco's approach to retaining employees as well as shoppers. Besides paying considerably more than competitors, for example, Costco contributes generously to its workers' 401(k) plans, starting with 3 percent of salary the second year and rising to 9 percent after 25 years.

ITS insurance plans absorb most dental expenses, and part-time workers are eligible for health insurance after just six months on the job, compared with two years at Wal-Mart. Eighty-five percent of Costco's workers have health insurance, compared with less than half at Wal-Mart and Target.

Costco also has not shut out unions, as some of its rivals have. The Teamsters union, for example, represents 14,000 of Costco's 113,000 employees. "They gave us the best agreement of any retailer in the country," said Rome Aloise, the union's chief negotiator with Costco. The contract guarantees employees at least 25 hours of work a week, he said, and requires that at least half of a store's workers be full time.

Workers seem enthusiastic. Beth Wagner, 36, used to manage a Rite Aid drugstore, where she made $24,000 a year and paid nearly $4,000 a year for health coverage. She quit five years ago to work at Costco, taking a cut in pay. She started at $10.50 an hour - $22,000 a year - but now makes $18 an hour as a receiving clerk. With annual bonuses, her income is about $40,000.
"I want to retire here," she said. "I love it here."

http://www.nytimes.com/2005/07/17/business/yourmoney/17costco.html?pagewanted=all&_r=0

$17 bucks an hour still falls short of $21 bucks an hour, but it's way better than $11.75 an hour. Plus they get bonuses, and health care.

I love Costco so much. I was so happy to read that they are thumping Sam's Club. Blum 3

GloriaInTX's picture
Joined: 07/29/08
Posts: 4111

"Alissa_Sal" wrote:

Realistically, I don't know what we could really do about it at this point without a major shift in our culture, which is why I guess we keep doing nothing and just paying the difference so Wal-Mart employees can live while Wal-Mart nets (NETS - this is their revenue AFTER they pay their bills) all of those billions of dollars annually. To tie this back into unions, if there was a union at Wal-Mart they might be able to fight for higher wages so that we paid less to subsidize Wal-Mart employees. True, that would cut into Wal-Mart's profit margins, which means that in order to retain those profit margins they would have to raise prices. So it's kind of lose-lose, isn't it?

And why exactly should Walmart be obligated to pay it's employee's more than other retailer's that have the same type of employee? Why should Walmart have to pay their employees more than Target or Kmart or Big Lots?

Joined: 08/17/04
Posts: 2226

They shouldn't. All business/all retailers SHOULD be paying living wage. I don't care who starts the trend but someone has to.

I think Walmart is a target because they are so large and profitable. Kmart and Big Lots are not as prolific.

AlyssaEimers's picture
Joined: 08/22/06
Posts: 6560

If Walmart all of the sudden decided to double their employee wage and their competitors did not, they would go under very fast. The only thing you could do would be to work to raise the minimum wage, which would hurt a ton of small businesses.

ETA - It would hurt large businesses as well unless you could get them all to raise the wage at the same time. Employees would not be better off because the cost of essentials would go up so much.

Alissa_Sal's picture
Joined: 06/29/06
Posts: 6427

"GloriaInTX" wrote:

And why exactly should Walmart be obligated to pay it's employee's more than other retailer's that have the same type of employee? Why should Walmart have to pay their employees more than Target or Kmart or Big Lots?

As I said before, it you think the amount they pay is fine and dandy....then fine. Just understand that if these employers don't pay their employees enough to live on, you and I will make up the difference in government assistance. It's one way or the other, you know?

I agree with Jessica, I'm not JUST talking about Wal-Mart. Wal-Mart is an easy target because they are the largest and their numbers are easy to get. Personally I would prefer that all employers paid a living wage for full time work.

AlyssaEimers's picture
Joined: 08/22/06
Posts: 6560

"Alissa_Sal" wrote:

Personally I would prefer that all employers paid a living wage for full time work.

You also can't have part time employees making $8/ hour and full time employees making $21/hour. This is very real in DH's line of work. One option for an Interpreter is in a school system. Other options are community work (doctor's offices, lawyers, court) and video relay interpreting. DH works full time in the school system and part time for a video relay interpreting. DH recently inquired about going full time video relay interpreting. They pay their employees well (Above the numbers we are talking here) but have made the decision company wide to do away with full time employees except for management. They have thousands of employees that work 32 hours a week so they are not considered full time. As their current full time employees quit or retire they will not be replaced. If you do not need insurance (we do), you can still make a living wage working 32 hours a week, but I am sure that is not the case in other industries.

Joined: 08/17/04
Posts: 2226

Exactly, either the employers pay enough for people to live on the basics or you pay more in taxes for their financial assistance programs. It is one or the other.

Bonita, I find it very hard to believe that Walmart (again just speaking since they are an example in question) with the profits they pull in yearly would go under. That's baloney. They won't have the profits they have seen but they will still make a profit, have happy employees that do not need financial assistance and employee loyalty as well which Costco sees.

AlyssaEimers's picture
Joined: 08/22/06
Posts: 6560

"Jessica80" wrote:

Exactly, either the employers pay enough for people to live on the basics or you pay more in taxes for their financial assistance programs. It is one or the other.

Bonita, I find it very hard to believe that Walmart (again just speaking since they are an example in question) with the profits they pull in yearly would go under. That's baloney. They won't have the profits they have seen but they will still make a profit, have happy employees that do not need financial assistance and employee loyalty as well which Costco sees.

If Walmart more than doubled their employee pay (In some cases tripled), but kept their prices the same to stay competitive, you think they would be able to stay afloat?

Joined: 08/17/04
Posts: 2226

For full time employees yes (and I'm including benefits in on this).

I would rather (andn ot that I typically shop at Walmart) pay 50 cents extra on my shampoo and have what I pay in taxes go down because less full time employees need food and housing assistance.

GloriaInTX's picture
Joined: 07/29/08
Posts: 4111

"Alissa_Sal" wrote:

As I said before, it you think the amount they pay is fine and dandy....then fine. Just understand that if these employers don't pay their employees enough to live on, you and I will make up the difference in government assistance. It's one way or the other, you know?

I agree with Jessica, I'm not JUST talking about Wal-Mart. Wal-Mart is an easy target because they are the largest and their numbers are easy to get. Personally I would prefer that all employers paid a living wage for full time work.

Maybe part of the problem is that our standard of living has increased more than the wages can support. It wasn't that long ago that families lived together under one roof and shared housing and expenses. Everyone didn't have their own house and cable and internet and cell phones. Now that standard of living is expected and people feel they are entitled to those standards and expect the government to make up the difference if they can't afford to live that way.

AlyssaEimers's picture
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"Jessica80" wrote:

For full time employees yes (and I'm including benefits in on this).

If that became a requirement I believe that Walmart would then just not have full time employees.

Joined: 08/17/04
Posts: 2226

"GloriaInTX" wrote:

Maybe part of the problem is that our standard of living has increased more than the wages can support. It wasn't that long ago that families lived together under one roof and shared housing and expenses. Everyone didn't have their own house and cable and internet and cell phones. Now that standard of living is expected and people feel they are entitled to those standards and expect the government to make up the difference if they can't afford to live that way.

My grandparents had a lower cost of living and a higher pay per that cost of living than my husband and I do. My grandfather dropped out of hs for the war and my grandmother only went to HS. Basic standards of living haven't changed. We're not talking houses, cable and internet and cell phones. We are talking pay to afford basic rent and food.

Joined: 04/12/03
Posts: 1683

"AlyssaEimers" wrote:

If Walmart more than doubled their employee pay (In some cases tripled), but kept their prices the same to stay competitive, you think they would be able to stay afloat?

Well, it's worked for In-N-Out. They have always been known for their higher wages than other fast food restaurants. Their prices are competitive. The quality of their food is competitive.

I do almost all of my grocery shopping at a union store. It's amazing that once you earn your reputation for being cheaper, people believe it no matter what. I am quite savvy in getting good deals and such. I know my favorite peanut butter is $3.74 at Target, $4.99 at my grocery store, and WalMart doesn't carry it. When it goes on sale at my grocery store, it is buy-one-get-one free or 2 for $6. Much cheaper than Target. They have such amazing sales that I save way more money shopping there for stuff on sale, than I would at Walmart. One thing I have noticed is the cereal is always cheaper at the store. They constantly have coupons bringing the varieties we like down to $1.66 per box. I haven't seen anywhere close to that at either Target or Walmart. If Walmart really was cheaper than all the union grocery stores, things like the grocery game and shows like Extreme Couponing would be pointless.

The other thing with Walmart is that they are misleading. Not everything is the same and the larger size isn't always the best value. Nor is the generic brand. Also, their generic brand of some items are not vegetarian whereas the name brand is.

At my grocery store they have (I think) 12 check-out lanes. The only time it is more than 3 deep is Fridays at 3:30. Otherwise, it's quick and convenient. At Walmart there are...I don't know...30 lanes or so. Yet only a handful will be open and the lines are 6 deep.

I don't think I am paying that much more overall by shopping at my grocery store instead of Walmart. When you factor in the value of my time, I'm happier paying a little more. Trips to Walmart (and Costco) raise my stress and anxiety level whereas Target, Sam's, and my grocery store are actually quite pleasant. That alone is worth the (sometimes) higher prices.

The chain I shop at has actually been around longer than Walmart. They must be doing something right.

Joined: 08/17/04
Posts: 2226

"AlyssaEimers" wrote:

If that became a requirement I believe that Walmart would then just not have full time employees.

So then you agree that a good business plan is:

1. Hire associates and only part time so lack of full time work becomes unavailable.
2. Do not pay a living wage or benefits and force people to take 2-3 more low paying full time jobs and and need gov't assistance.
3. Reap a gigantic profit.

Alissa_Sal's picture
Joined: 06/29/06
Posts: 6427

"GloriaInTX" wrote:

Maybe part of the problem is that our standard of living has increased more than the wages can support. It wasn't that long ago that families lived together under one roof and shared housing and expenses. Everyone didn't have their own house and cable and internet and cell phones. Now that standard of living is expected and people feel they are entitled to those standards and expect the government to make up the difference if they can't afford to live that way.

Well, as I said, when I looked at the amounts they were budgeting in my area, they were quite frugal. It's true that two parents contributing would be bringing in more money which would help, but a) it wasn't that long ago that people lived comfortably on one person's income, and it's well documented how the income disparity issue plays into that, and b) I would hardly call being a single parent a "luxury."

Joined: 04/12/03
Posts: 1683

"AlyssaEimers" wrote:

If that became a requirement I believe that Walmart would then just not have full time employees.

Do they anyway? I know when I worked at Target only a handful were full time. Maybe 15 "part-time" to 1 full time. Same thing with MM. In our department, there were 7 that were considered full time. Not sure on the other numbers...maybe 100 during the peak months.

AlyssaEimers's picture
Joined: 08/22/06
Posts: 6560

"Jessica80" wrote:

So then you agree that a good business plan is:

1. Hire associates and only part time so lack of full time work becomes unavailable.
2. Do not pay a living wage or benefits and force people to take 2-3 more low paying full time jobs and and need gov't assistance.
3. Reap a gigantic profit.

The goal of most business is to make a profit. Not to become the replacement of Welfare. It is a businesses responsibility to pay at least minimum wage. Now if a company wants to attract the most skilled and talented employee they will pay a higher wage. Sure it would be nice if all jobs paid a good living wage, but all that would do is inflate costs. That would be like saying Everyone should have more money, so lets pass out free $100 bills to everyone. All that would do is decrease the value of the $100 bill. The better option would be to create more good paying jobs that are not retail.

Joined: 08/17/04
Posts: 2226

I agree with EW that I shop at a local grocery store known for their low prices. I typically pay much less per item than I do for the same item at Walmart and do not find them to be a very good deal at all. PLus I get agitated in there...not sure if colors, lights who knows. And I HATE that there is about 4 registers dealing with 750 people. Gross.

boilermaker's picture
Joined: 08/21/02
Posts: 1984

I think you are missing the point that we are trying to make (I say "we" bc Alissa and Jessica did a great job capturing what I was talking about.)

Nobody is saying that the government should mandate that WalMart pay their employees more. What we are saying is that we should be educated consumers and demand with our collective buying power what company policies work in the open market.

I personally will not shop at Wal-Mart. I avoid it. I make enough money that I have the luxury of making that choice. I get that my relatives who live off of social security and WIC and SNAP don't have that "luxury"-- but I vote with my dollar. I understand that either WalMart or Target or Costco actually pays a living wage or **I** as a taxpayer end of paying for it out of my check.

This article accurately captures what we are trying to convey. It explains why Whole Foods pays their employees more than they have to, and why it is working for their company.

Whole Foods CEO: Here

I just think it is amazing how corporate America has duped people into thinking that paying people crap for their services is better than a living wage. And that those arguing in favor of this crap pay are people who are making the crap pay. It seriously astounds me.

Either they pay people a living wage out of their ridiculous profits ($15B. BILLION. Do you get how much money that is?) Walmart employs $1.4M people. They could give each of their $1.4M employees a $10K bonus and still make $1B profit. I have a hard time defending their crap wages (1,400,000 * 10,000 = $14B).

AlyssaEimers's picture
Joined: 08/22/06
Posts: 6560

"ethanwinfield" wrote:

Do they anyway? I know when I worked at Target only a handful were full time. Maybe 15 "part-time" to 1 full time. Same thing with MM. In our department, there were 7 that were considered full time. Not sure on the other numbers...maybe 100 during the peak months.

I do not think many people work there full time, that is why it does not make sense to me to only have that requirement for full time employees.

"boilermaker" wrote:

I think you are missing the point that we are trying to make (I say "we" bc Alissa and Jessica did a great job capturing what I was talking about.)

Nobody is saying that the government should mandate that WalMart pay their employees more. What we are saying is that we should be educated consumers and demand with our collective buying power what company policies work in the open market.

I personally will not shop at Wal-Mart. I avoid it. I make enough money that I have the luxury of making that choice. I get that my relatives who live off of social security and WIC and SNAP don't have that "luxury"-- but I vote with my dollar. I understand that either WalMart or Target or Costco actually pays a living wage or **I** as a taxpayer end of paying for it out of my check.

This article accurately captures what we are trying to convey. It explains why Whole Foods pays their employees more than they have to, and why it is working for their company.

Whole Foods CEO: Here

I just think it is amazing how corporate America has duped people into thinking that paying people crap for their services is better than a living wage. And that those arguing in favor of this crap pay are people who are making the crap pay. It seriously astounds me.

Either they pay people a living wage out of their ridiculous profits ($15B. BILLION. Do you get how much money that is?) Walmart employs $1.4M people. They could give each of their $1.4M employees a $10K bonus and still make $1B profit. I have a hard time defending their crap wages (1,400,000 * 10,000 = $14B).

My understanding was the original point of this debate was about unions and that employers should be forced to pay their employees more. I do agree that Walmart is not always the cheapest and I do not do my grocery shopping there. I do get other non food necessities there and items that are not at the stores I shop at. I get most of my food items at Aldies.

boilermaker's picture
Joined: 08/21/02
Posts: 1984

But the point is that WalMart actively works to squelch unions and keep their employees from unionizing so that they can continue this practice. My dh worked there about 10 years ago and it was amazing how prevalent the anti-union rhetoric was. He found it frightening how anti-union they were.

Then people said "oh, there is no need for unions today-- work environments are safe and employees are fairly compensated." We just disagree. And have the facts to prove it.

Do you think $15B in profits is reasonable? Because I don't. I'm tired of subsidizing ridiculous CEO pay and board pay and millionaires. I would prefer that we as consumers demanded better for our fellow citizens and ourselves (by taking home more pay!) I think their profits should reflect what it actually costs to run the business, which IMO includes healthcare and a living wage so that full-time employees aren't dependent upon government assistance from MY paycheck.

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