Why Costco Deserves Your Business

 Why costco deserves yoru business

I used to shop regularly at Sam's Club, and Wal-mart for that matter. Not so much anymore. But sometimes I have to force myself and that's what really bugs me. For example, Wal-Mart is the only vendor of organic broccoli, cauliflower, and spinach within a 35 mile radius of the small country town where I live in rural America. (Update: The Winn-Dixie store across the street from Wal-Mart, has started carrying a whole section of organic produce, as well as organic and gluten-free products on their shelves.)

Because of mergers and acquisitions,  modern capitalism has continued its inevitable monopolization when left without proper regulation. Typically the way we have avoided this inevitability in the past was through the enforcement of the Sherman Antitrust Act. The purpose of the act according to its author, Senator John Sherman, a Republican from Ohio, is "To protect the consumers by preventing arrangements designed, or which tend, to advance the cost of goods to the consumer."

Monopoly Has Become A Major Problem Worldwide

MonopoliesUsed extensively around the turn of the century by Teddy  Roosevelt and others against the likes of the Standard Oils to combat monopolization, The Sherman Antitrust Act was last used against a major company in the seventies. That case was under the Ford, Carter, and Reagan administrations against AT&T.

The result of this enforcement inactivity? Most industries in the US are 80% controlled by 3 to 6 mega companies who have literally laid waste to the opportunities of local small business owners who are left to fight for the crumbs from the "big box" retailer's table. While it is true that the "big box" stores approach often brings low prices, in most cases it also brings low wages.  And just what is actually gained when low prices and low wages are combined? Nothing.

Retail Monopolies Have Left Little Opportunity For Local Retailing

It's worse than just having limited places to shop or price fixing. The dangers also lurk in the lack of competition and opportunity in communities big and small. Or even more devastating is its effect on families worldwide. In the vigorous attempt for competitive pricing, the inevitable result is low wages and not just for the "big box" employees but for all the employees of their suppliers as well. And in many cases, this now means worldwide low wages and often leads to impressive substandard working conditions.

It doesn't have to be this way and in some cases it is not. Costco is the prime example of what can be achieved with a cooperative approach to employee relations.Their record is impressive and their approach truly justifies my business.

And what does Costco's major competitor deserve? Not so much. It ravages the landscape of human endeavors with low wages and low hours forcing many of its employees and their suppliers' employees to multiple jobs or to public assistance in order to have enough to live and raise their kids.

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While it may be hard as consumers to avoid the big boys altogether, we can pick those that are responsible good citizens, live by the golden rule, and who treat their employees humanely.  In the end, we all live cooperatively whether we choose to accept it or not.

Costco's Profit Soars To $537 Million Just Days After CEO Endorses Minimum Wage Increase

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...

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Costco CEO: Raise The Minimum Wage To More Than $10 Per Hour

HUFFINGTON POST - President Barack Obama wants to raise the federal minimum wage to $9 per hour. And the CEO of one of America's largest retailers says such a move would be good for workers and businesses alike.

"At Costco, we know that paying employees good wages makes good sense for business," Jelinek said in a statement. "We pay a starting hourly wage of $11.50 in all states where we do business, and we are still able to keep our overhead costs low."

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POLYCONUNDRUM.com - In the following article from Harvard Business Review, Wayne F. Cascio, helps explain why the Walmartization of America is flawed and why their business practices are self-defeating. We are left only to explain why companies the size of a walmart that have almost inexhaustible analysis monies would continue such devastating practices. Is the reason just plain laziness or is upper management distracted with their leisure activities? If so, why? Most likely the cause is low marginal tax rates  and the excess disposable wealth it produces.  This has created a short-timer attitude at the top of the  managerial heap. Only short-term profits count. Long-term effects such as the disappearance of the middle-class, or the destruction of the environment don't count in their short-term profit equation.

The High Cost of Low Wages

HARVARD BUSINESS REVIEW - Wal-Mart’s legendary obsession with cost containment shows up in countless ways, including aggressive control of employee benefits and wages. Managing labor costs isn’t a crazy idea, of course. But stingy pay and benefits don’t necessarily translate into lower costs in the long run.

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Walmart: The High Cost of Low Prices


About the Author

jenningsRobert Jennings is co-publisher of InnerSelf.com with his wife Marie T Russell. InnerSelf is dedicated to sharing information that allows people to make educated and insightful choices in their personal life, for the good of the commons, and for the well-being of the planet. InnerSelf Magazine is in its 30+year of publication in either print (1984-1995) or online as InnerSelf.com. Please support our work.

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This article is licensed under a Creative Commons Attribution-Share Alike 4.0 License. Attribute the author Robert Jennings, InnerSelf.com. Link back to the article This article originally appeared on InnerSelf.com


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