3 ms·
I don't fully understand how paying worker's more money makes the stores cleaner, have brighter lighting, or ensures that the shelves are stocked. Much of that
by davidf18 10y ago
I don't fully understand how paying worker's more money makes the stores cleaner, have brighter lighting, or ensures that the shelves are stocked. Much of that has to do with spending money to remodel stores, paying more money to ensure that enough staff are employed to clean the stores (McDonald's is famous for cleanliness thanks to the leadership of its founder), and improving logistics and ensuring there is enough staff to put items on shelves. I'm glad people are getting more money, but I see a correlation with higher wages not a causation, and I don't see they changes in budgets for the stores which may account for the higher sales per store.
According to Megan McArdle's article on Walmart and Costco [1], Walmart has one employee for every $211,000 in revenue while Costco has one employee for every $620,000 in revenue. For each dollar of revenue, Walmart hires 3 people compared to 1 for Costco, which has 107,000 employees.
Thus, if Costco were using Walmart's metrics, they would hire about 215,000 additional employees, most of whom would need only a high school education, at that. Jobs that can be done with little education are the jobs that are being exported to Mexico and China.
Interestingly, articles on paying higher wages never seem to focus on the number of people employed.
[1] https://www.bloomberg.com/view/articles/2013-08-27/why-walmart-will-never-pay-like-costco https://www.bloomberg.com/view/articles/2013-08-27/why-walma...
- tedmiston 10y agoCostco is selling wholesale / larger quantities to a different customer segment who is also spending more money though. I'm not sure comparing the two here makes sense to me.
- davidf18 10y agoBut many people do compare Walmart to Costco by comparing the relatively lower wages that Walmart pays compared to Costco (or Trader Joe's) [1] I'm simply demonstrating that Costco could hire more employees among the segment of people with little education and help to lower unemployment. Many people batter Walmart for not increasing wages for employees, but just as important is that Costco could hire many more employees and help to reduce unemployment. In my view, I think the writers should point out Walmart as an example of hiring 3 times more people per dollar of revenue than Costco (I don't know the figure for Trader Joe's) and thus, compared to Costco, doing much more to reduce unemployment. But you never read an article asking Costco to hire more people, only criticizing Walmart for not paying enough. [1] http://www.theatlantic.com/business/archive/2013/03/the-trader-joes-lesson-how-to-pay-a-living-wage-and-still-make-money-in-retail/274322/ http://www.theatlantic.com/business/archive/2013/03/the-trad...
- tedmiston 10y agoIt would definitely be interesting to see comparable data around Trader Joe's or even Whole Foods.