I keep telling myself I'm a capitalist. I've spent the last 4 years of my life working for souless multi-national financial institutions. You know, the kind of companies that loan money to Enron and who enjoy turning you over to collection agencies. Doesn't bug me. I sleep like a baby at night. I understand that it's dog eat dog out there, just as I understand that unbridled competition is the bitter pill that makes for an economic powerhouse. I'm familiar with the concepts of 'free markets', 'guns and butter' and all of the rest of it.
So yesterday I'm at work breathing that groovy super-cooled office building air, my shirt buttoned all the way up, my Michael Kors tie knotted just so, and I'm feeling pretty damn'd alright. Not 'master of the universe' good, but I think it's fair to say that I'm doing alright and capitalism and I are on pretty good terms. I guess you could say that I'm feeling pretty Ayn Rand (I do loves me those uppity literary references).
Of course I'm slacking, catching up on the news and all that, and I come across a little story in the New York Times (remember kids, bug me not for all your password needs).
It sounded innocent enough at first. "How Costco Became the Anti-Wal-Mart". Sounds interesting right? Some retailer going toe to toe with Walmart and beating them at their own game by doing it better. That's capitalism by gawd! But as I read it, a chill actually shivers it's way down my spine. That's not what the article is about at all.
Now, it's good to get in the habit of at least glancing at the news (no, Hustler doesn't count... Playboy does), so you should read the whole article, but in case you are as lazy as I am, I'll sum it up for you.
A few facts on Costco.
It is the 29th ranked American company based on Revenue. (i.e. they makes a lot of dollars)
They are the nations largest Warehouse retailer, whooping Sam's by a considerable margin
Costco's profits went up 22% last year.
Their stock price is up about 15% over 12 months.
They pay their employees $17 an hour, 42 percent higher than Sam's Club
They offer very generous health and benefits packages to even part time workers.
That last bit, the 17 dollar an hour bit, is the one I want to talk a bit more about.
I read the above statments and think, "Well, hot damn! A company who treats it's employees well and is succeding because of it. Henry Ford redux. God bless this country."
Here's some quotes for you:
first a happy quote:
Despite Costco's impressive record, Mr. Sinegal's (the CEO and founder) salary is just $350,000...(Mr. Sinegal says)"Having an individual who is making 100 or 200 or 300 times more than the average person working on the floor is wrong."
now for the chills:
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.
Bill Dreher of Deutsche Bank, complained last year that at Costco "it's better to be an employee or a customer than a shareholder."
Basically, we have a bunch of over educated, over manicured, suit monkeys trying to convince the head of one of this country's most successful companies that he is treating his employees too well.
Let's get this straight.
22% growth in profits isn't enough. 15% return on stock price (damn good in any business climate) isn't enough. By gawd, cut those salaries and wipe out those health benefits. Sure, you'll end up with the same brainless zombies working floor as your competitors, sure your customers will miss the experienced and knowlegable staff, but those suit monkeys will be able to afford another ferrari.
I generally consider myself a capitalist complete with a capitalist sized soul (about the size of a dime, thank you), but then something like this comes along and I feel sick. Retail sucks, having to work in retail sucks, having to support a family on the 10 bucks an hour walmart of circuit city will pay you sucks. God forbid some guy comes along and actually pays his unskilled labor a livable wage...
*sigh* maybe I'm overeacting. I don't know, but I feel being a decent human being is good business. Do unto others, what goes around comes around, karmic circles and all that.
I just realized this rant doesn't have a conclusion. I'm just disturbed, and wanted to tell you about it.
I guess I'll move on to my second tidbit.
I want to pay homage to a true champion. A consecutive three time blue ribbon winner. A hard nosed competitor who forever changed the face of the sport. A one of a kind hero who, due to illness, went into a well deserved retirement as of July 2005.
I of course, am refering to Sam Lockheed, three time winner of the "World's Ugliest Dog" title at the Sonoma-Marin Fair.
Click here for the story.
Sam, you will be missed...