Robert Jennings

Why the Trader Joe's Model Benefits Workers--And the Bottom-Line

Trader Joes

A well paid, healthy, happy employee is a more productive employee. How much more productive? Very, and there are plenty of examples of these employees paying for themselves. Why don't most businesses do the same? Because shorting an employee's wages flows into the pockets of the management and owners for awhile.

Why the Trader Joe's Model Benefits Workers--And the Bottom-Line

NATIONAL JOURNAL - Companies who invest in higher salaries for low-level employees find success in a competitive market.

The average American cashier makes $20,230 a year, which in a single-earner household would leave a family of four living under the poverty line. But if he works the cash registers at QuikTrip, it’s an entirely different story. The convenience store and gas station chain offers entry-level employees an annual salary of around $40,000, plus benefits. Those high wages didn’t stop QuikTrip from prospering in a hostile economic climate. While other low-cost retailers spent the recession laying off staff and shuttering stores, QuikTrip expanded to its current 645 locations across 11 states.

Many employers believe that one of the best ways to raise their profit margin is to cut labor costs. But companies like QuikTrip, the grocery store chain Trader Joe’s, and Costco Wholesale are proving that the decision to offer low wages is a choice, not an economic necessity. All three are low-cost retailers, a sector that is traditionally known for relying on part-time, low-paid employees. Yet these companies have all found that the act of valuing workers can pay off in the form of increased sales and productivity.

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Costco is another business that has excelled while paying its employees a living wage and profiting handsomely. On the other hand, we find their major competitor who has ingratiated itself by indirectly raiding the social safety net.

Why Costco Deserves Your Business

POLYCONUNDRUM - Less than a week after Costco CEO Craig Jelinek spoke out in favor of raising the minimum wage, the big-box retailer’s earnings showed that paying workers a living wage doesn’t always hurt business.

Costco reported a profit of $537 million last quarter, up from $394 million during the same period last year, according to the Wall Street Journal. The healthy earnings report comes just six days after Jelinik urged lawmakers to raise the minimum wage to $10.10 an hour.

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