Noah Brand wonders why the NY Times focuses on the negatives when it comes to ethical business practices
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.”
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.”
No wonder its so nice to shop there.
Consider what happened with Ben and Jerry’s. When they went public it was just a matter of time before they were acquired by another entity. The amount of money they spent on social responsibility created a situation where the potential shareholder value that could be squeezed out exceeded the transaction costs of an acquisition. In this analyst’s opinion these dollars could be invested elsewhere to achieve optimal shareholder value. On the other hand- companies like the Container Store have made high pay and excellent benefits into a competitive advantage. Looks like Costco is pursuing a similar strategy- if it works… Read more »
This is awesome. 😀 I work in a chain supermarket in the UK and though the health costs issue is taken care of by the NHS here and not employers, it’s fantastic to hear of a chain supermarket that is looking after its employees in this way. Happy staff is the best sign in retail, and as retail staff work so closely with the customers who are funding the business, doing things to keep your staff happy is really an excellent investment! I’m surprised the NY Times does not agree.