Wal-Mart was once again found guilty of violating workers' rights when they disciplined workers who were exercising their rights by going on strike:
A National Labor Relations Board judge has ruled that Wal-Mart Stores Inc. unlawfully disciplined workers who staged protests in May and June of 2013 and ordered the retailer to reinstate 16 former employees, as well as give them back pay.
Judge Geoffrey Carter ruled that the employee actions were protected under the National Labor Relations Act and that Wal-Mart violated labor laws by "disciplining or discharging several associates because they were absent from work while on strike."
The judge also ordered Wal-Mart to hold a meeting in 29 stores throughout the country to inform employees of their right to strike, and to promise not to threaten or discipline employees for doing so.
The complaint was filed on behalf of the labor-backed group "Our Walmart," which called it a huge victory.
Even though they keep losing these fights, Wal-Mart keeps doing it because they are counting on the workers that don't know their rights or, because of their craptastically low wages, can't afford to fight for their rights.
Is it any wonder why they are one of the biggest funders in the war on unions?
CEO Jim Sinegal is adamant that he treats his employees well
Costco's average pay, for example, is $17 an hour, 42 percent higher
than its fiercest rival, Sam's Club. And Costco's health plan makes
those at many other retailers look Scroogish. One analyst, Bill Dreher
of Deutsche Bank, complained last year that at Costco "it's better to be an employee or a customer than a shareholder."
Mr. Sinegal is also adamant that he offer his customers quality products at a fair price:
But the pièce de résistance, the item he most wanted to crow about,
was Costco's private-label pinpoint cotton dress shirts. "Look, these
are just $12.99," he said, while lifting a crisp blue button-down. "At
Nordstrom or Macy's, this is a $45, $50 shirt."
Combining high
quality with stunningly low prices, the shirts appeal to upscale
customers - and epitomize why some retail analysts say Mr. Sinegal just
might be America's shrewdest merchant since Sam Walton.
Mr. Sinegal also is consistent with his margins and not always trying to bleed an extra penny:
At Costco, one of Mr. Sinegal's cardinal rules is that no branded
item can be marked up by more than 14 percent, and no private-label item
by more than 15 percent. In contrast, supermarkets generally mark up
merchandise by 25 percent, and department stores by 50 percent or more.
"They could probably get more money for a lot of items they sell," said Ed Weller, a retailing analyst at ThinkEquity.
But
Mr. Sinegal warned that if Costco increased markups to 16 or 18
percent, the company might slip down a dangerous slope and lose
discipline in minimizing costs and prices
All the while Wall St. is not very happy with his business model:
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. "He's right that a happy employee is a productive
long-term employee, but he could force employees to pick up a little
more of the burden."
How Ms. Kozloff still has a job is beyond me, because if she was even remotely competent at her job, she would know that Mr Sinegal is having his employees share the burden. The burden he is having them share in though is success. While Wall St. likes to make sure only a few people make all of the money, Mr. Sinegal believes that his $2 Billion net worth and annual salary of $350,000/yr are enough!
Despite Costco's impressive record, Mr. Sinegal's salary is just
$350,000, although he also received a $200,000 bonus last year. That
puts him at less than 10 percent of many other chief executives, though
Costco ranks 29th in revenue among all American companies.
"I've
been very well rewarded," said Mr. Sinegal, who is worth more than $150
million thanks to his Costco stock holdings. "I just think that if
you're going to try to run an organization that's very cost-conscious,
then you can't have those disparities. Having an individual who is
making 100 or 200 or 300 times more than the average person working on
the floor is wrong."
All of this goes against everything Wall St. believes in and esepecially against everything that came out of the mouths of the Willard and Gilligan during the last election season. Luckily for Costco's employees and customers, Mr. Sinegal does what he knows to be right, not listen to the greed induced Wall St. Consultants.
Mr. Sinegal begs to differ. He rejects Wall Street's assumption that
to succeed in discount retailing, companies must pay poorly and skimp on
benefits, or must ratchet up prices to meet Wall Street's profit
demands.
Good wages and benefits are why Costco has extremely low
rates of turnover and theft by employees, he said. And Costco's
customers, who are more affluent than other warehouse store shoppers,
stay loyal because they like that low prices do not come at the workers'
expense. "This is not altruistic," he said. "This is good business."
He
also dismisses calls to increase Costco's product markups. Mr. Sinegal,
who has been in the retailing business for more than a half-century,
said that heeding Wall Street's advice to raise some prices would bring
Costco's downfall.
In other words, He could take Wall St.'s advice, but it would mean the end of Costco.
Digging deeper into the Costco business model, there is no way they could survive if they were unionized right? Wrong again!
Costco also has not shut out unions, as some of its rivals have. The
Teamsters union, for example, represents 14,000 of Costco's 113,000
employees. "They gave us the best agreement of any retailer in the
country," said Rome Aloise, the union's chief negotiator with Costco.
The contract guarantees employees at least 25 hours of work a week, he
said, and requires that at least half of a store's workers be full time.
Wow, ignore Wall St's advice, treat your employees well, be fair to your customer and your vendors. There is no way that is a successful business model right?
Costco was founded with a single store in Seattle in 1983; it now has
457 stores, mostly in the United States, but also in Canada, Britain,
South Korea, Taiwan and Japan. Wal-Mart, by contrast, had 642 Sam's
Clubs in the United States and abroad as of Jan. 31.Costco's profit rose
22 percent last year, to $882 million, on sales of $47.1 billion. In
the United States, its stores average $121 million in sales annually,
far more than the $70 million for Sam's Clubs. And the average household
income of Costco customers is $74,000 - with 31 percent earning over
$100,000.
Next thing you know, you will tell me the employees actually like working there?
Beth Wagner, 36, used to manage a Rite Aid
drugstore, where she made $24,000 a year and paid nearly $4,000 a year
for health coverage. She quit five years ago to work at Costco, taking a
cut in pay. She started at $10.50 an hour - $22,000 a year - but now
makes $18 an hour as a receiving clerk. With annual bonuses, her income
is about $40,000.
"I want to retire here," she said. "I love it here."
Posts
