Thursday, July 29, 2004

WalMart versus CostCo

Costco, Wal-Mart duel in political arena

Long story about the two discount chains differing political contributions, the gist of which is that WalMart likes Republicans because they allow them to exploit their workers. Ferinstance:

Kerry, 60, a four-term senator, pledges to induce more employers to insure workers with a $257 billion proposal calling for the government to pay most so-called catastrophic health-care costs -- only for companies that provide comprehensive coverage. He'd raise the minimum wage and make it easier for workers to join unions.

Those policies might benefit Costco and hurt Wal-Mart.

Issaquah-based Costco offers comprehensive health insurance to most of its 78,000 U.S. employees, making it eligible for Kerry's plan, said Kerry's top domestic policy adviser, Sarah Bianchi, 31. That could cut 10 percent, or $35 million, off its annual health care premiums.

Wal-Mart's health plan for its 1.3 million U.S. workers is probably not broad enough to qualify for the savings that Kerry's proposal would bring, since it doesn't cover enough workers, said Jason Furman, 33, the Democrat's chief economic-policy adviser. Fewer than half of Wal-Mart's employees are enrolled in the company health plan, according to figures supplied by the retailer.

Costco wouldn't have to raise salaries with Kerry's proposal to increase the minimum wage to $7 an hour, from $5.15 now. It already pays hot-dog vendors as much as $16 an hour, and the lowest wage it pays is $10 an hour.

That's higher than the $9.96 average wage paid at discount stores bearing the Wal-Mart name. Sam's Club spokeswoman Jolanda Stewart declined to provide wage information for the warehouse unit.

Best quote: "Sinegal makes no apologies for Costco's policies, saying higher wages reduce employee turnover, which lowers training costs. 'I'm not a social engineer,' he said in an interview. 'Paying good wages is simply good business.'"

If you're still shopping at Walmart, why?


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