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Old 03-13-2013, 06:34 AM   #1
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Costco Profit Soars To $537 Million Just Days After CEO Endorses Min. Wage Increase

http://www.huffingtonpost.com/2013/0...n_2859250.html

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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.
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Old 03-13-2013, 07:13 AM   #2
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I love Costco.
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Old 03-13-2013, 07:14 AM   #3
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Gr8 customer service too.
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Old 03-13-2013, 07:28 AM   #4
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Costco pays well already, so min wage probably does not affect them.

I am for it too.

The problem with this country is that gap between welfare and minimum wage is so small that their is no incentive for the unethical to work.
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Old 03-13-2013, 07:34 AM   #5
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the Costco CEO is a pretty straight up guy from what I hear, if more companies would be run like Costco the world would be a much better place.
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Old 03-13-2013, 07:41 AM   #6
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Today most CEOs take home an average of 380 times more that their employees. In 1973 the average CEO received 20 times their average worker's pay. In 1980, when the middle-class had peaked, the average CEO received 42 times their average worker's pay. Today Costco's CEO only earns about 28 times his average employee. -- Source
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Old 03-13-2013, 08:00 AM   #7
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wow, you mean the CEO of Costco that gave a speech at the DNC supports Obama? No way.

http://abcnews.go.com/blogs/politics...a-on-business/

http://patriotfire76.blogspot.com/20...s-liberal.html

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Costco CEO Jeff Sinegal spoke at the Democratic Convention this summer in favor of tax increases. Friday Costco announced a special dividend payout of $7 a share purposely being distributed in an effort to dodge potential tax increases coming in January.
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Old 03-13-2013, 08:05 AM   #8
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wow, you mean the CEO of Costco that gave a speech at the DNC supports Obama? No way.

http://abcnews.go.com/blogs/politics...a-on-business/

http://patriotfire76.blogspot.com/20...s-liberal.html
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Old 03-13-2013, 08:14 AM   #9
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Just pointing out the facts, sir. Also should point out the blatant hypocrisy of liberals who turn a blind eye to CEO's that have views that align with their own. This guy and Steve Jobs are prime examples of people that can act one say, vote and support another and become folk heroes.
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Old 03-13-2013, 08:15 AM   #10
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wow, you mean the CEO of Costco that gave a speech at the DNC supports Obama? No way.

http://abcnews.go.com/blogs/politics...a-on-business/

http://patriotfire76.blogspot.com/20...s-liberal.html
He still runs a very successful business, what's the issue?
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Old 03-13-2013, 09:43 AM   #11
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Their lean thinking makes them competitive and able to pay well which should be the example for others. They show its possible and hopefully other retailers learn from them. But, other sectors may not be able to operate under the same model because of the nature of their business.

Costco may be able to afford to pay $45k a year for a non-skilled position but others can not... Read: small Businesses. What's good for the golden goose of retail isn't good for the gander.
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Old 03-13-2013, 09:50 AM   #12
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Originally Posted by phrozen06 View Post
http://www.huffingtonpost.com/2013/0...n_2859250.html



A job creator that actually gets it.
Explain this to me then...if he thinks paying his employees more money (for whatever reason) is such a good idea, why doesn't he do it on his own? Why does he need the government to force him to do it?

Thought so.
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Old 03-13-2013, 09:54 AM   #13
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Explain this to me then...if he thinks paying his employees more money (for whatever reason) is such a good idea, why doesn't he do it on his own? Why does he need the government to force him to do it?

Thought so.


Quote:
Originally Posted by The Article You Didn't Read

"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.
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Old 03-13-2013, 10:02 AM   #14
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I didn't disagree. I completely understand his logic, and agree 100% with it. Employee turnover costs money. My point was to the OP, who supports the government mandate for it, which REMOVES THE ENTIRE POINT the CEO is making. If everyone gets a raise, then the effect is removed.

Furthermore, if you agree with the CEO, then you will see that free market works. Costco employees are paid more, are happier, and thus, more efficient...result? Profit. This is not a secret and companies should all do this, as it makes perfect sense. However, the government forcing the raise would negate this entire principle.
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Old 03-13-2013, 10:07 AM   #15
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Costco doesn't pay minimum wage and treats their employees well, not because they have to, but because they know that is what is best for the business.
Others can follow suit, essentially ignoring minimum wage to get the business results they want based on the desired level of skill of their employees. You don't need to pay a teenage burger flipper $15 / hour.
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Old 03-13-2013, 10:14 AM   #16
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Costco doesn't pay minimum wage and treats their employees well, not because they have to, but because they know that is what is best for the business.
Others can follow suit, essentially ignoring minimum wage to get the business results they want based on the desired level of skill of their employees. You don't need to pay a teenage burger flipper $15 / hour.
Thats my point. If everyone pays $8 and costco pays $12, they will have more loyal and hardworking staff (saving them money.) If you raise EVERYONE to $12, Costco would then need to pay $16, and that may cause them to LOSE money (unless they raise the price of the merchandise which hurts the end user) so a government mandate would actually hurt businesses. I really struggle to understand how people can't see this. I am 100% for paying above minimum wage, but it should be up to the business owner, not some law which does the opposite of its intended purpose.
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Old 03-13-2013, 10:28 AM   #17
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Originally Posted by NFRs2000nyc View Post
Explain this to me then...if he thinks paying his employees more money (for whatever reason) is such a good idea, why doesn't he do it on his own? Why does he need the government to force him to do it?

Thought so.
He does do it on his own, paying his employees -- who he obviously values as more than cold business assets to be squeezed however possible -- very good and fair wages for their work. Result, happy and highly motivated staff > excellent service and productivity > highly satisfied customers > great sales > great profits > everyone benefits. These seem like excellent reasons for paying a good wage and treating one's employees with respect, fairness and decency, concepts that seem lost on far too many of today's managers and business leaders.

As mentioned, I don't think he's supporting a higher minimum wage so much for his own workers, who he already treats very well, but for workers in general. The great success of his company shows that decent pay is not necessarily the ruination of a well-run company nor that highly bloated wages and pay packages are necessary for excellent management and leadership of said company. To repeat casino is no lie stats:
"Today most CEOs take home an average of 380 times more that their employees. In 1973 the average CEO received 20 times their average worker's pay. In 1980, when the middle-class had peaked, the average CEO received 42 times their average worker's pay. Today Costco's CEO only earns about 28 times his average employee."
I think today's CEO/Board of Directors relationships has become far too insular, incestuous and basically corrupt in that they are more interested in protecting their own shared interests (absurdly high pay packages for each other) than the long term health, success and viability of either their own companies, much less the overall American economy, and far much less that of most Americans.

I find it hard to believe that the average CEO is now, somehow, 19Xs more productive/valuable/smart/whatever than one from 1973. That they get paid, relatively speaking, 19X's more is, I think, a clear indication of the corruption, whether legal or simply moral, of the upper echelons of today's business community. Jelinik I think is one of the few who actually is earns and is worth what he is paid, underpaid even but he doesn't seem quite so relentlessly driven by self-enrichment above all else as are so many of his peers.

Personally, I think corporate pay scales should be far more tied to average and overall earnings from top to bottom, with perhaps some set base wage, a base profit incentive added above that, and then all wages set to some X-amount of that, with perhaps the new hire getting 1X that base package and the CEO getting maybe 20-30X, max, of whatever that is, tying everyone's own success and fates together to the overall success of the company.
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Old 03-13-2013, 10:33 AM   #18
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Originally Posted by NFRs2000nyc View Post
Explain this to me then...if he thinks paying his employees more money (for whatever reason) is such a good idea, why doesn't he do it on his own? Why does he need the government to force him to do it?

Thought so.
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Originally Posted by casino is no lie View Post
The explanation is clearly outlined in the article you didn't read. They are not waiting to be told to pay more... they already are.
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Originally Posted by NFRs2000nyc View Post
I didn't disagree...
I don't know whether to cry or laugh in your face. I think I'll choose the latter.


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Old 03-13-2013, 10:37 AM   #19
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Wow, I didn't know I was talking to 3rd graders that take everything literally. Clearly (to me anyway) this thread isn't about Costco, but rather the idea that people should be paid more money above the standard minimum wage.

Even in the original post...

Quote:
spoke out in favor of raising the minimum wage
Costco has nothing to do with this, other than the fact that Costco itself proves Obama wrong, by clearly showing that if it's good for the business, the business will do it all on it's own. Raising minimum wage WILL cost many of these low skill workers their jobs.
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Old 03-13-2013, 10:38 AM   #20
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Wow, I didn't know I was talking to 3rd graders that take everything literally.
Were we supposed to take your post figuratively?
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