Employers Can Learn From Costco

In response to “Costco Sees Value in Higher Pay,” by James Flanigan, Feb. 15:

Costco Wholesale Corp., the very same company cited by supermarket management as a threat to their staying in business, is able to make contributions to the employee benefits program at least one-third higher to 92,000 full- and part-time employees than those made by supermarket employers to their 59,000 workers.

This suggests that Cost- co’s management better understands the nature of their business and the true source of their costs, and is better focused and positioned to address the management of these costs rather than blame their employees for any perceived lack of ability to compete.

If the ability of this nation’s companies to compete in world and domestic markets is so directly tied to labor rates, as Safeway Inc.’s chief executive believes is the case for his firm, and the nation’s labor rates are rolled back to some reduced level believed to restore and enhance competitive ability, what happens to disposable income and consumer confidence?

Further, what happens to the consumer-driven U.S. economy when the consumer’s ability to function as a consumer is impeded?

Dave Trenschel

Via e-mail

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Every corporation in America should listen to Costco: that there is nothing wrong with an employee earning enough to be able to buy a house and having a family health plan.

Costco also has declined to “offshore” its call center operation because it feels that would send the wrong message to its employees.

Wall Street believes that Costco’s bottom line is shoddy because of the company’s generosity to its employees. Costco’s employee turnover rate is one-third the retail industry average, and the company says its intent is to build a company that will be around 50 years from now.

Perhaps Wall Street and corporate executives who have no regrets about American workers’ losing their jobs will feel differently if consumers boycott companies that are concerned only about the bottom line at the expense of people’s lives.

Stan Horwitz

Stevenson Ranch