But then the CEO of Costco doesn't earn $15 million a year plus bonuses. He squeaks by on a paltry $750,000 a year. The problem with Walmart is not that they can't afford to pay workers a decent wage and provide benefits, but that company owners and executives reward themselves excessively by hogging all the productivity gains (including those which rightly should go to workers). This is simply legal theft -- the theft of labor (more commonly called unregulated capitalism).
I don't see how you can possibly draw the conclusions you draw here, Ted. The "operating income growth" is an essentially meaningless number. How well or not well you pay your workers is not going to directly affect your growth one way or the other.
ReplyDeleteWalmarts's labor and overhead as a percentage of sales are 73% higher than Costco's. That is not a reflection of how workers are treated or paid, it's a measure of the degree to which the company desires to make profit. Costco makes a lot more profit than does Walmart, and normally you are complaining that businesses, oil companies and insurance companies for instance, make too much profit. Here you are saying that Costco is the good guy because it makes more profit on its sales than does Walmart.
Sales per square foot is 35% lower for Walmart than for Costco. So which store is selling at lower prices, and taking care of the needs of low income families.
The big factor is that Walmart's profit per employee is 20% lower than Walmart's is, so again, you are being critical of the company which receives lesser benefit of its employees. Costco makes more profit from each employee, and somehow that is a good thing. But when oil companies and insurance companies make more profit that is a bad thing. Why isn't Costco giving some of that extra that each employee is earning for it to the employees?
Walkmarts premise is that it provides low prices so that low income people can buy the things that it needs at prices they can afford to pay. Costco's premise is that it provides low prices by buying in bulk. Have you, by any chance, compared the selling prices of goods at the two different stores to see which one is best making good on its promise?
You cetainly have illustrated that Costco is the more profit oriented of the two.