Costco is actually one of the most profitable retailers in the US. Here's a snippet from an article I just read:From looking at 3) and 5) one might conclude that you're assuming that the employees who are paid $8 an hour at Ikea aren't working hard. I don't think that anyone who works as a receptionist expects to be paid $20 an hour, especially when the boss takes a loss for it. At the same time, though, if you want someone competent answering the phones at your office, you probably should be willing to pay more than $8 an hour. There's a lot of room in-between.
I agree with you that hard work should be rewarded and we shouldn't punish those who are willing to take a chance and invest, but a situation such as Costco only making half the profit that Wal-Mart does (I'm just pulling that out of my ass as a rough example, I have no idea what the actual numbers are) so they can pay their employees a good wage is hardly punishment.
And [CEO] Sinegal says he's also built a loyal work force. In fact, Costco has the lowest employee turnover rate in retailing. Its turnover is five times lower than its chief rival, Wal-Mart. And Costco pays higher than average wages -- $17 an hour -- 40 percent more than Sam's Club, the warehouse chain owned by Wal-Mart. And it offers better-than-average benefits, including health care coverage to more than 90 percent of its work force.
Costco doesn't have a P.R. department and it doesn't spend a dime on advertising. There's a real business advantage to treating employees well, Sinegal said. "Imagine that you have 120,000 loyal ambassadors out there who are constantly saying good things about Costco. It has to be a significant advantage for you," he explained.
But the most remarkable thing about Sinegal is his salary -- $350,000 a year, a fraction of the millions most large corporate CEOs make. "I figured that if I was making something like 12 times more than the typical person working on the floor, that that was a fair salary," he said.
(he does own a whole bunch of Costco stock, but his salary seems reasonable to me, as does his logic)
Costco CEO Finds Pro-Worker Means Profitability - ABC News
Costco's Profit Rises 17% - WSJ.com
Costco's profits have been rising steadily, and in early 2010, it posted a 46% increase in quarterly profits, and, as of December, 2010, their profits had risen another 17%. From what I can figure, their profits are in the billions. They also continue to open warehouses in the US, as opposed to slashing pay and jobs.
So, yes, it is possible to treat workers fairly and equitably while also maintaining the scared profit line for executives and share holders.