, Newburyport, MA


March 9, 2013

Some companies back calls to lift minimum wage


“I believe that their positive treatment of employees, especially compared to competitors, has definitely been positive,” he said. “It has a strong company culture at the employee level.”

The company doesn’t outsource its call center; a few years ago, when it engaged a third-party company to clean its facilities, the company eventually decided to hire the workers full time and give them better wages and health benefits.

“I think we’ve always resisted several things that seem like they make economic sense,” said Chief Financial Officer James Galanti. “For us, we feel it’s better long term that we do it this way.”

Costco employees typically stay with the company longer than employees at other big-box retailers, many of whom are employed by outside agencies, rather than the retailers. Galanti said this is important _ since retail employees interact with customers frequently, it’s important for them to be happy, so they’ll treat customers well, he said.

“We run our business the way we think it should be run, and we’ve done pretty well doing it,” said Galanti, in an interview last year. “When tasked with looking at all the costs, we tend to not look at ‘how do we reduce expenses.’ ... There are things — like taking health care out — that we’re not willing to touch.”

These policies have helped Costco avoid some of the labor unrest that retailers such as Wal-Mart have faced this year, as workers call for higher wages and unions. But they’re unlikely to spread to other retailers. Wall Street has urged companies to cut fixed costs such as labor during the recession and recovery, making raises and health insurance for retail employees unlikely to come soon — unless, of course, they work for Costco.

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