Costco Proves Republicans Wrong By Paying a Living Wage and Watching Profits Soar

Costco is proving Republicans and the Wal-Mart wrong by paying workers a living wage while also earning record profits.

While Wal-Mart experienced February sales that were considered, “total disaster,” Costco’s earnings for the second quarter of the year climbed 39%. The New York Times reported, “Costco Wholesale’s net income for its second quarter climbed 39 percent as it pulled in more money from membership fees, sales improved and it recorded a large tax benefit.”

Costco CEO Craig Jelinek openly supports raising the minimum wage to $11.50 an hour, “At Costco, we know that paying employees good wages makes good sense for business. We pay a starting hourly wage of $11.50 in all states where we do business, and we are still able to keep our overhead costs low. An important reason for the success of Costco’s business model is the attraction and retention of great employees. Instead of minimizing wages, we know it’s a lot more profitable in the long term to minimize employee turnover and maximize employee productivity, commitment and loyalty. We support efforts to increase the federal minimum wage.”

Costco is proof that the Republican idea that labor must be stomped on in order for our economy to prosper is wrong. It is possible for companies to earn record profits while respecting their workers and paying them a living wage. Wal-Mart embodies the conservative ideology that the country functions best when wealth is concentrated at the top. To match the Walton family’s fortune, an average Wal-Mart employee would have to work for the company for 7 million years. This model is what Republicans are advocating for the entire country, and it is failing to lead to prosperity.

Given Costco’s record profits, Wal-Mart’s blaming of the payroll tax and gas prices for their decline in sales doesn’t wash. Costco’s customers also faced higher gas prices and payroll taxes, but their sales were up six percent during the first quarter of the year.

Despite what both Wal-Mart and Republicans have been saying, companies can prosper and still have a conscience. When companies pay a living wage, workers benefit. When workers make more money, they spend more money. When people spend more money, the economy is stronger. When the economy is stronger, the nation as a whole benefits.

The economic virtuous circle that Republicans and their corporate benefactors thought they killed is alive, well, and living at Costco.

Jason Easley

Jason is the managing editor. He is also a White House Press Pool and a Congressional correspondent for PoliticusUSA. Jason has a Bachelor’s Degree in Political Science. His graduate work focused on public policy, with a specialization in social reform movements.

Awards and  Professional Memberships

Member of the Society of Professional Journalists and The American Political Science Association