Wal-Mart’s Money Card Targets Low Income Shoppers

“It’s giving customers something its competitors either won’t provide or won’t provide cheaply.”

So no whining or running to your politicians, big banks - you definitely missed out on this one!

<i>As Marketplace explores, this is yet another way that Wal-Mart profits off its customers’ poverty<i>

Nice wording WalMart Watch, and speaking of profits, Wally, what about all those fees those banks are charging their sub-prime customers? 

Looks like the unbanked will finally get a decent deal after all.

Big W

Wally & Big W,

Maybe the banks and check cashing places will have to change their greedy ways and every consumer will profit from this move.  That is, if they decide to compete, but, they will probably go to Barney Frank and ask for his help instead!!

You guys have to understand two things:

1. Banks have ZERO interest in competition and they rake in money off the poor through sub-prime mortgages (lending money to people when the bank knows they cannot possibly pay it back), bank charges, credit card interest and fees, etc. Some banks don’t even want your business if you are not rich. Mellon Bank sold all their retail banks to Citizens a few years back, predicting that consumer banking was dead. Well, it made a comeback. And what happened with Mellon? Oh, you can still bank there. It’s called private banking and you have to have a minimum of $500,000 to deposit.

2. Unions have no interest in the poor improving their lot. If poor people try to better themselves, there will be more competition for construction, steel, auto and manufacturing jobs. Unions want poor people to stay poor, ie. no banking options, no low priced retail savings, no job opportunities, etc. Do we really believe that American union workers care about the well-being of foreign workers? How can they claim to care about foreigners and then deny foreigners the right to have jobs?

In short, neither banks nor unions want any kind of competition.

Diversion fraud #1-

“And what happened with Mellon? Oh, you can still bank there. It’s called private banking and you have to have a minimum of $500,000 to deposit.”
Nick the imbecile fraud-

So, If your multi-billionaires like the Waltons then Mellon gets your business.

Lie/fraud/propaganda #2-

“Unions have no interest in the poor improving their lot.’
Nick the liar-

Union negotiating for $17/hr retail wages and 92% health care coverage and many many other benefits computes as ‘have no interest in the poor’ psychopath speak for Nick as the WalMart/Edelman propaganda drivel of the week.

WalMart- We are not just impoverishment paying wages and dumping associates onto the states for health care, we are also advanced payday loans and time card chiselers. The Walton billionaires want to thank the poverty wage slaves for allowing Lee Scott and Rob Walton etc. to bank at Mellon.

“In short, neither banks nor unions want any kind of competition.”

Nick in

Neither does Walmart when it comes to the workers having a say in their workplace and working conditions.

R E M E M B E R
J O N Q U I E R E
Q U E B E C
Home of Walmart Worker Abuse
We will never forget what you did Walmart.
Never

SDV,

“Union negotiating for $17/hr retail wages and 92% health care coverage and many many other benefits computes as ‘have no interest in the poor’ psychopath speak for Nick as the WalMart/Edelman propaganda drivel of the week.”

It would help a lot, if you thought before you spoke!!  Higher wages draw a higher level of employee, the ‘middle class’.  Therefore, the ‘poorer’ level people are passed over for the more qualified ‘middle class’!!  By keeping wages lower, the ‘middle class’ people won’t even apply and the ‘lower class’ people have the opportunity to get the jobs.  Also, if you hire ‘higher wage’ people, you either have to cut your profit margin or raise your prices and because the latter is usually the better choice, it’s the ‘poor’ people who will suffer the most by having to pay the higher prices.

Bob

We constantly hear from these WMW people that ‘Costco pays $17 per hour (false) and contributes 92% of the employee health insurance costs’. First off, not all employees earn $17 per hour. Just like the argument against Wal-Mart’s average wage, does Costco’s $17 per hour include long-term employees, part-timers, the CEO, the store managers, etc.? The employees paying 8% of their premiums is fine but what is their deductible? What good is this health plan to a single mother of four who earns $30,000 per year but has a $5,000 out of pocket cost each year?

It is irrelevant that Costco pays ‘$17 per hour’. Costco’s labor costs mean nothing to Wal-Mart. There are salespeople at Nordstrom’s who earn more than $100,000 per year plus great benefits. Don’t Costco people help customers? Why is their top employee earning $34,000 per year while Nordstrom’s top employee earns $100,000 + per year? The greater question is Why does it matter? Nordstrom’s employee earnings are irrelevant to Costco and Costco is irrelevant to Wal-Mart. Do these people realize how immature and ridiculous they sound? “Costco pays $17 per hour, therefore, Wal-Mart should pay $17 per hour!”. Let’s expand on that.

1. A decent apartment in New York City will run you at least $1 million, therfore, apartments in Kansas City should cost at least $1 million.

2. Nordstrom’s top salespeople earn more than $100,000 per year, therefore, all retail sales people should earn $100,000 + per year.

3. Workers at Nucor earn more than $70,000 per year therefore, all steelworkers should earn more than $70,000 per year.

4. Lexus Hybrid SUV’s cost close to $50,000, therefore, all manufacturers should charge at least $50,000 for their SUVs/

I could go on but the point is, we live in a free market. Companies are free to pay what they want (as long as it is above minimum wage) and charge what they want for whatever products they want to produce. Why don’t all companies pay minimum wage? Because they have to pay according to the difficulty of their work, the skills and education required and the desired workforce. They have to sell a product that the public wants at a price the public is willing to pay but at which level the company can earn a profit. This is the free market.

Why is steak at Ruth Chris steakhouse more expensive than steak at Garfield’s? Quality, atmosphere, reputation and the willingness of the customer to pay more at Ruth Chris.

Europe has learned first hand about keeping lower income people out of the job market. By making it more difficult to fire people and forcing employers to pay high wages, they have kept millions of people unemployed and in poverty, wrecking their economies. You see, a company is less willing to hire people if they can’t have the flexibility to fire them if necessary and they may not add positions if they can’t do it in a cost effective manner. A company could hire 3 employees at $10 per hour or 1 employee at the mandated $20 per hour. So what happens? The company may or may not hire the one employee but we know for sure they will not hire the 3 employees. Best case scanerio? 2 people don’t get hired.

Apparently, 2 of 3 people being unemployed is acceptable if the third person earns twice as much as all 3 would if they had jobs.

Wal-Mart founder Sam Walton once said, “I pay low wages. I can take advantage of that. We’re going to be successful, but the basis is a very low-wage, low-benefit model of employment.”
http://en.wikipedia.org/wiki/Criticism_of_Wal-Mart#/
note-iswalmartgood

“Is Wal-Mart Good for America?” PBS. November 16, 2004. Retrieved on February 24, 2007

“It is irrelevant that Costco pays ‘$17 per hour’.”

Nick with a dysfunctional social conscience-
(love of money psychopath)

“I could go on but the point is, we live in a free market. Companies are free to pay what they want (as long as it is above minimum wage) and charge what they want for whatever products they want to produce.”

Nick’s ‘free’ market includes huge welfare subsidies paid for by the taxpayer suckers to help float the WalMart business model and contribute to the billionaire Waltons.

Nick, you lie by omission and are an economic fraud with propaganda best described as Loadus Crapus Maximus-

WalMart- ‘Living wages?’ ‘corporate responsibility?’ we don’t understand? And we don’t want to either.

What Sinegal has proven is that a company doesn’t have to be ruthless. Being humane and ethical can also make you money.

<http://abcnews.go.com/2020/Business/story?id=1362779>

The WalMart Wolves of Bentonville-

“The Shepherd drives the wolf from the sheep’s throat, for which the sheep thanks the shepherd as a liberator, while the wolf denounces him for the same act as a destroyer of liberty.” Abraham Lincoln

SanDiego,

Costco is ethical and not ruthless, you people say?

Then what should we make of this? 

http://www.mycostcobook.com/

Nick,

SDV believes in the old adage, that if you repeat something often enough, people will start to believe it!!

SDV,

“Union negotiating for $17/hr retail wages and 92% health care coverage”

Is this the starting wage, an average or the high wage?  What is the starting wage?  What is the number of employees per store, compared to a Sams Club?  The ‘devil’ is in the details, not blanket statements!!

Bob already knows these facts but I cut and paste them again to show him as the poor blogger fraud propagandist in denial of reality on a deliberate scale.

“For example, Costco Wholesale pays its workers $17 an hour on average, while its competitor, Wal-Mart’s Sam’s Club, pays only $10 an hour on average.”

James O’Toole and Edward E. Lawler III are professors at the University of Southern California’s Marshall School of Business and authors of The New American Workplace (Palgrave-MacMillan, 2006).
Low Costs Versus High Wages?
http://www.forbes.com/2007/04/24/
corporate-layoffs-costs-oped-cx_jot_0425jobs

Costco CEO Finds Pro-Worker Means Profitability
High Wages, Employee Benefits Build Loyalty—and P.R. Ambassadors
By ALAN B. GOLDBERG and BILL RITTER
August 2, 2006

And 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.
http://abcnews.go.com/2020/Business/story?id=1362779

Costco CEO Says Higher Minimum Wage Means ‘Better Jobs and Wages’
by Mike Hall, Jan 31, 2007

The Costco chief certainly knows what he’s talking about. His successful venture, launched in 1983, now has 130,000 workers and operates 504 stores, where the average worker makes $17 an hour and the lowest-paid earns $11 an hour. It’s good business sense says Sinegal.
http://blog.aflcio.org/2007/01/31/
costco-ceo-says-higher-minimum-wage-means-better-jobs-
and-wages/

What Sinegal has proven is that a company doesn’t have to be ruthless. Being humane and ethical can also make you money.

<http://abcnews.go.com/2020/Business/story?id=1362779>

“Given Costco’s performance, the question for Wall Street shouldn’t be why Costco isn’t more like Wal-Mart. Rather, why can’t Wal-Mart deliver high shareholder returns and high living standards for its workforce? Says Costco CEO James D. Sinegal: “Paying your employees well is not only the right thing to do but it makes for good business.”

Few things are harder to put up with than the annoyance of a good example. Mark Twain, Pudd’nhead Wilson (1894)

Steve Tripoli reports that the nation’s largest retailer may have something to teach competitors about servicing the poor.

Like they did at “servicing” the upscale?

Anyone else see the irony that the Wal-Mart promoted “race to the bottom” is biting back at the Beast?

Chasing poor people to get what little money they have and then taking a tiny sliver as profit. Take that business plan to the bank and see how much they’re willing to lend.

SanDiego,

Your statement is a little misleading:

The $17 average is in high-cost of living areas (like your own area) for permanent, full-timers.  I seriously doubt a Costco rank-and-file employee in, say, Louisville, KY is making that kind of coin.

Nor does Costco deliver high shareholder returns.  In fact, Wall Street once said they would favor better sharholder returns, even if it was at the expense of the employees.

About those 504 stores, over a hundred of those are not even in the United States, which makes their size something of a moot point......especially if you don’t live on the east/west coasts.

Obviously, you can’t have it your way, buddy..........take one of the three arguments and work with it awhile.

Jake,

Not misleading at all-

The Union Difference
Though only about 18% of Costco’s total workforce is unionized, union representation creates a ripple effect and helps determine labor standards in all stores. The Teamsters represent about 15,000 workers at 56 Costco stores in California, New York, New Jersey, Maryland and Virginia. Workers are covered by West coast and East coast contracts, negotiated in February and April of last year.

“The agreements lock in wage and benefits packages that are the highest in the grocery and [discount] retail industries,” said Rome Aloise, chief IBT negotiator for Costco and Secretary-Treasurer of Local 853 in San Leandro, Calif.

Costco passes on similar compensation packages to its non-union workers; the contracts act as templates for other stores’ employee handbooks.

<http://www.laborresearch.org/print.php?id=391>

Though only about 18% of Costco’s total workforce is unionized, union representation creates a ripple effect and helps determine labor standards in all stores.”

“Costco passes on similar compensation packages to its non-union workers; the contracts act as templates for other stores’ employee handbooks.”

“...all stores.” “...to its non-union workers...”

Your doubt does not replace documented facts.

Then you have made this error-

“Nor does Costco deliver high shareholder returns.  In fact, Wall Street once said they would favor better sharholder returns, even if it was at the expense of the employees.”

Ahead of the Bell: Costco Wholesale
April 17, 2007 7:48 AM ET
After combing Costco’s books and adjusting for his new estimates, Kaiser raised his price target on Costco’s stock to $65 from $56. The new price target is about 19 percent higher than the retailer’s stock’s close at $54.40 on the Nasdaq Stock Market Monday.
http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=AP&Date=20070417&ID=6756370

In fact, Costco has outperformed Wal-Mart on the stock market over the last five years. The real reason for the difference in compensation and benefits is that Costco employees have much lower turnover, better interaction with customers and are more productive than Wal-Mart’s workers.
For example, Costco Wholesale pays its workers $17 an hour on average, while its competitor, Wal-Mart’s Sam’s Club, pays only $10 an hour on average

James O’Toole and Edward E. Lawler III are professors at the University of Southern California’s Marshall School of Business and authors of The New American Workplace (Palgrave-MacMillan, 2006).
http://www.forbes.com/2007/04/24/corporate-layoffs-costs-oped-cx_jot_0425jobs

“In fact, Costco has outperformed Wal-Mart on the stock market over the last five years.”

What Sinegal has proven is that a company doesn’t have to be ruthless. Being humane and ethical can also make you money.

<http://abcnews.go.com/2020/Business/story?id=1362779>

“Given Costco’s performance, the question for Wall Street shouldn’t be why Costco isn’t more like Wal-Mart. Rather, why can’t Wal-Mart deliver high shareholder returns and high living standards for its workforce? Says Costco CEO James D. Sinegal: “Paying your employees well is not only the right thing to do but it makes for good business.”

The Costco business model is out running the WalMart labor/retail strip mining model and the reputation differential is enormous on behalf of Costco.

It is not considered an argument that Costco, No. 28 in the Fortune 500, is the fourth-largest retailer in the country and the seventh-largest in the world.
http://money.cnn.com/magazines/fortune/fortune_archive/2006/10/30/8391725/index.htm?postversion=2006102515

You don’t make a third argument and all your basic statements are from a lack of study-

SanDiego,

Not disputing the benefits package at Costco as that’s pretty much well-documented, but to read your statements, you would have your legions of readers believing that $17 bucks an hour is the norm at Costco, which is entirely untrue.

That “average” is based largely on those states you mentioned (California, New York, New Jersey, Maryland and Virginia), where the cost of living is already through the roof compared to places like Louisville!

I say, again, the typical Costco rank-and-filer in middle America is not making those hugo bucks.  If they were, consumers would be supporting the business model like crazy and Costco would be opening new stores left and right.

The fact is Costco will not go into a community where the average household income is less than $50K a year.  High household incomes lead to shopping for what is expected to be trendier merchandise, and ultimately, better wages.

Not saying Costco is bad, but they aren’t the golden goose you make them out to be, either.  After all, it’s a big-box warehouse store, right?

“Not disputing the benefits package at Costco as that’s pretty much well-documented, but to read your statements, you would have your legions of readers believing that $17 bucks an hour is the norm at Costco, which is entirely untrue.”

Jake, you are accepting the same documentation for the health care package that Costco gives to its employees as the available information and documentation showing that Costco pays an average of $17/hr and a minimum of $11/hr.

ABCNEWS, FORBES, NEW YORK TIMES, AFLCIO, LABORRESEARCH and the NEW YORKER, WIKIPEDIA etc etc all document the $17/hr average and $11/hr minimum at Costco.

What source do you provide for your claim?
You provide no documented basis for your claim.

Costco continues to grow- source money.cnn.com-

It is not considered an argument that Costco, No. 28 in the Fortune 500, is the fourth-largest retailer in the country and the seventh-largest in the world.
http://money.cnn.com/magazines/fortune/fortune_archive/
2006/10/30/8391725/index.htm?postversion=2006102515

WalMart is in a stall at best in the United States. They have been found out as an egregious business model and this will continue to grow. Their own former employees are their worst enemies.

The Costco business model is out running the WalMart labor/retail strip mining model and the reputation differential is enormous on behalf of Costco.

What Sinegal has proven is that a company doesn’t have to be ruthless. Being humane and ethical can also make you money.

<http://abcnews.go.com/2020/Business/story?id=1362779>

As for the WalMart/Bentonville wolves/slobs-

“The Shepherd drives the wolf from the sheep’s throat, for which the sheep thanks the shepherd as a liberator, while the wolf denounces him for the same act as a destroyer of liberty.” Abraham Lincoln

I just want you to know, SDV, I’m taking shots all over this blog for you!

I refuse to put in the time researching Costco the way you have so as you so eloquently put it in another thread:

I yield the floor to the distinguished orator from documentation- YOU!

Costco really seems to bother Nick and Sideshow Bob and the rest of the Edelman frauds. Desperation in an act trying to make another look bad rather than fix their own problems. It shows the disconnect between management and the propaganda crew. It does fit my estimate however about where WalMart is going. Corporate psychopathy into a new extreme.

If you are drawing fire because of Costco, blame the hooch smellin chowderheads in the ‘war room’. Maybe someone there discovered San Diego, Texas and got confused on the way home from the weaselville bunker. If you are looking to be diplomatic with the agnostic Edelman slobs might I suggest this from my file on reverse evangelism-

“Diplomacy is the art of telling someone to go to Hell, in a manner which will make them look forward to the trip”

I yield back to the unwounded anti-WalMart senior gunslinging wordsmith from Texas-