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WalMart vs. Costco

Walmart take the low-road model and Costco take the high-road. Costco is much better for our society and Walmart is destructive.

A recent editorial in Seattle times outlines the “low-road” model and the “high-road” model. Walmart, taking the low-road, aims to make prices the lowest by paying employees the least possible and paying the least possible for the products that they sell. Everything is taken on the low road. Costco, on the other hand, pays much more for their employees, with health packages and higher hourly rates, and they support unions for their employees. Costco takes the high road.

Costco is seeing employees stay much longer and Costco actually experiences higher profits per employee. Read more in an editorial column in Seattle Times.

Indeed, a Business Week analysis shows Costco’s average hourly wage is $15.97, far above the Wal-Mart (Sam’s Club) $11.52 figure (even excluding the 25 percent of Wal-Mart workers who are low-paid part-timers). The yearly employer contributions to health care ? Costco, $5,735; Wal-Mart, $3,500. Of Costco employees, 82 percent are covered by the health plan; Wal-Mart, 47 percent. Employee turnover at Wal-Mart is three times higher than Costco’s.

And then comes the clincher, suggesting the low-road approach may not be so clever after all: Costco’s profit per employee is $13,647; Wal-Mart’s, $11,039.

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