Crusader

Less than a week after Costco CEO Craig Jelinek spoke out in favor of raising the minimum wage, the big-box retailer’s earnings showed that paying workers a living wage doesn’t always hurt business.

Costco reported a profit of $537 million last quarter, up from $394 million during the same period last year, according to the Wall Street Journal. The healthy earnings report comes just six days after Jelinik urged lawmakers to raise the minimum wage to $10.10 an hour.

“At Costco, we know that paying employees good wages makes good sense for business,” Jelinik said in a statement last week. “Instead of minimizing wages, we know it's a lot more profitable in the long term to minimize employee turnover and maximize employee productivity, commitment and loyalty. We support efforts to increase the federal minimum wage.”

Costco is known for paying its workers wages that are generally above average for the retail industry. An average Costco worker made about $45,000 in 2011, according to Fortune. That’s compared to an average of about $17,486 per year for a worker at comparable Walmart-owned Sam’s Club.

And apparently the extra pay pays off. Costco makes more than $10,000 in profits per employee, while Walmart takes home about $7,400 per worker, according to the Daily Beast (Walmart and Costco aren’t exactly the same type of business, however).

In addition to offering its workers high pay and the opportunity to unionize, Costco also provides a benefit many of its competitors don’t: health insurance for part- and full-time employees.

Some analysts have complained in the past that Costco’s worker-friendly policies aren’t so friendly to shareholders. If Tuesday’s results are any indication, those concerns may be exaggerated.

Costco's Profit Soars To $537 Million Just Days After CEO Endorses Minimum Wage Increase


I think the most important thing pointed out in the article is the cost of getting and training new staff versus paying a little more to keep the ones you already have. I work for a big Facility management company and our employee turnover is pretty big and cost a humongous amount of money in training and supervising new employees and also lack of quality because of said new employees.

You kids get off my lawn!

TheOak

Very few companies focus on training and retention adequately. They are revolving doors of employees with subprime experience and skill sets. They scratch their heads in amazement that they are not the market leaders.

Rickh

Now I'm confused. The Costco CEO spoke out in favor of a minimum wage increase. I agree that this is way overdue.

You are in favor of this also???????

SmashMouth

Costco is just one of those companies that knows how to run its business and manage their employees.

With the ever increasing costs of living and taxes (ObummerCare, etc ...), wages should be higher. Anyone with skill sets and talent will not make minimum wage anyway. Minimum wage jobs are meant for entry level type jobs. If you are in a job that pays minimum wage, the chances are your skills haven't risen above what the market dictates.

Rickh

I totally agree!! This does feel strange to agree here. The reason I'm confused is that minimum wage is a progressive policy and certainly not what most business leaders want.

Amazing...

TheOak

Of course you are confused. You keep trying to box me into being a modern republican with lack of vision ans understanding fir the big picture, and I am not.

I am against Obamacare, not working people being able to pay their electricity bill. I am for people that WORK making more money, not people getting a raise via the dole.

Here is the reality and what has not been brought to light. While the CEO of Cosco is for a raise in the minimum wage, he is also the CEO of a company that pays MORE than minimum wage. As identified by Cosco being a company that has a higher wage scale than other companies with comparable jobs. That being said Cosco is not known as a company that has quality of product, so their business model is not the same as a company that produces high quality merchandise, their furniture is laminate over pressboard with aluminum or pot metal hardware.

Raising minimum wage will not effect his payroll.

Now for the (I refuse to use the word genius in regards to this president and his staff) so ill use trickery.

Reps are refusing to increase taxes, so.... The plan is to raise minimum wage, which will increase payroll for people that work in the private sector, increased payroll means increased payroll taxes going to the Government. Raising minimum wage for companies like Burger King raises their pay scale entirely.

In the end Obama is getting his tax increase through the working class, NOT through the Corporations paying higher taxes.

For all you liberals that ***** and moan about the private sector outsourcing internationally and applaud Obama when he plays class warfare trying to paint an ugly picture of private companies that outsource internationally.

OUR TSA UNIFORMS ARE OUTSOURCED TO MEXICO.

TheOak

I am FOR the working class getting more pay. I am against the Government mandating the quality of product. Costco does not make a product that I see as quality, so I don't buy it.

The CEO of Costco would not be for the government mandating quality and forcing them to sell only hard wood furniture.

Rickh

Again, I agree. I don't see where the govt. is mandating production of anything. This isn't communist China.

I don't even know of a Costco. anywhere around me, I imagine it's like Sams or Super Target. I'd be willing to try it.

Rickh

I'm not trying to box you in on purpose Oak, This is what a lot of people on right right say regarding the minimum wage. I'm glad to see this.


I would be for a flat tax irrespective of Capital Gains or income. I don't see the GOP running to get rid of loop holes which would take us in that direction.

TheOak

"Don't see", doesn't mean "not there"
Cuomo - Drink size
Obama - Magazine size
Obama - fuel blends
Obama - MPG
I can keep going