Wednesday, March 13

Costco seems to understand how the economy works

Costco CEO Craig Jelinek supports increasing the minimum wage to $10.10 an hour and indexing it to inflation. The company continues to thrive, and its success illustrates a fundamental principal of how our economy works: Demand for goods and services (which drive the bulk of our economy) comes primarily from the working and middle classes, and ensuring that these groups have purchasing power is a wise policy position that supports GDP growth.
"The discount retailer CEO said in a statement that his company pays a starting wage of $11.50 across the country and is 'still able to keep our overhead costs low.'
"The current federal minimum wage is $7.25 an hour. Had it kept up with inflation since its 1968 peak, it would now be $10.58. A minimum wage that had kept up with both inflation and increasing productivity would now be worth $21.72 an hour.
"Costco is known as a big box retail store with unusually good working conditions and wages. New York Times labor reporter Steven Greenhouse has described it as the 'anti-Walmart,' due in part to its relatively high wages and low turnover. In a November 29 interview with Greenhouse regarding Costco's labor practices, The Ed Show's Ed Schultz said, 'This is how you treat workers.'
"Comparatively, Walmart's starting wages can be as low as $8 an hour, with annual increases of as little as 20 or 40 cents. For someone working 40 hours a week without any vacation time that amounts to $16,640 a year."
Costco CEO wants minimum wage hike to $10-plus (MSNBC)