Joe Carcello has a great job. The 59-year-old has an annual salary of $52,700, gets five weeks of vacation a year, and is looking forward to retiring on the sizable nest egg in his 401(k), which his employer augments with matching funds. After 26 years at his company, he’s not worried about layoffs. In 2009, as the recession deepened, his bosses handed out raises. “I’m just grateful to come here to work every day,” he says.
This wouldn’t be remarkable except that Carcello works in retail, one of the stingiest industries in America, with some of the most dissatisfied workers. On May 29, Wal-Mart Stores employees in Miami, Boston, and the San Francisco Bay Area began a weeklong strike. (A Walmart spokesman told MSNBC the strike was a “publicity stunt.”) Workers at an Amazon.com fulfillment center in Leipzig, Germany, also recently held strikes to demand higher pay and better benefits. (An Amazon spokesman says its employees earn more than the average warehouse worker.) In its 30-year history, Carcello’s employer, Costco, has never had significant labor troubles.
Costco Wholesale, the second-largest retailer in the U.S. behind Walmart, is an anomaly in an age marked by turmoil and downsizing. Known for its $55-a-year membership fee and its massive, austere warehouses stocked floor to ceiling with indulgent portions of everything from tilapia to toilet paper, Costco has thrived over the last five years. While competitors lost customers to the Internet and weathered a wave of investor pessimism, Costco’s sales have grown 39 percent and its stock price has doubled since 2009. The hot streak continued through last year’s retirement of widely admired co-founder and Chief Executive Officer Jim Sinegal. The share price is up 30 percent under the leadership of its new, plain-spoken CEO, Craig Jelinek.
Despite the sagging economy and challenges to the industry, Costco pays its hourly workers an average of $20.89 an hour, not including overtime (vs. the minimum wage of $7.25 an hour). By comparison, Walmart said its average wage for full-time employees in the U.S. is $12.67 an hour, according to a letter it sent in April to activist Ralph Nader. Eighty-eight percent of Costco employees have company-sponsored health insurance; Walmart says that “more than half” of its do. Costco workers with coverage pay premiums that amount to less than 10 percent of the overall cost of their plans. It treats its employees well in the belief that a happier work environment will result in a more profitable company. “I just think people need to make a living wage with health benefits,” says Jelinek. “It also puts more money back into the economy and creates a healthier country. It’s really that simple.” (...)
Like his predecessor, Jelinek, 59, preaches simplicity, and he has a propensity for aphorisms ending with “good things will happen to you.” “This isn’t Harvard grad stuff,” he says. “We sell quality stuff at the best possible price. If you treat consumers with respect and treat employees with respect, good things are going to happen to you.” He vows to continue Sinegal’s legacy and doesn’t seem to mind a widespread characterization of himself as a “Jim clone.” “We don’t want to be casualties like some of these other big retailers, like the Sears of the world and Kmart and Circuit City. We are in for the long haul,” he says.
This wouldn’t be remarkable except that Carcello works in retail, one of the stingiest industries in America, with some of the most dissatisfied workers. On May 29, Wal-Mart Stores employees in Miami, Boston, and the San Francisco Bay Area began a weeklong strike. (A Walmart spokesman told MSNBC the strike was a “publicity stunt.”) Workers at an Amazon.com fulfillment center in Leipzig, Germany, also recently held strikes to demand higher pay and better benefits. (An Amazon spokesman says its employees earn more than the average warehouse worker.) In its 30-year history, Carcello’s employer, Costco, has never had significant labor troubles.
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| CEO Craig Jelinek |
Despite the sagging economy and challenges to the industry, Costco pays its hourly workers an average of $20.89 an hour, not including overtime (vs. the minimum wage of $7.25 an hour). By comparison, Walmart said its average wage for full-time employees in the U.S. is $12.67 an hour, according to a letter it sent in April to activist Ralph Nader. Eighty-eight percent of Costco employees have company-sponsored health insurance; Walmart says that “more than half” of its do. Costco workers with coverage pay premiums that amount to less than 10 percent of the overall cost of their plans. It treats its employees well in the belief that a happier work environment will result in a more profitable company. “I just think people need to make a living wage with health benefits,” says Jelinek. “It also puts more money back into the economy and creates a healthier country. It’s really that simple.” (...)
Like his predecessor, Jelinek, 59, preaches simplicity, and he has a propensity for aphorisms ending with “good things will happen to you.” “This isn’t Harvard grad stuff,” he says. “We sell quality stuff at the best possible price. If you treat consumers with respect and treat employees with respect, good things are going to happen to you.” He vows to continue Sinegal’s legacy and doesn’t seem to mind a widespread characterization of himself as a “Jim clone.” “We don’t want to be casualties like some of these other big retailers, like the Sears of the world and Kmart and Circuit City. We are in for the long haul,” he says.
by Brad Stone, Bloomberg Businessweek | Read more:
Image: Ryan Lowry
