[biztech-discussion] walmart vs. costco

  • From: "Samantha Clark" <sclark.abq@xxxxxxxxxxxxx>
  • To: <biztech-discussion@xxxxxxxxxxxxx>
  • Date: Tue, 3 Aug 2004 08:16:01 -0600

Title: Walmart v. Costco: Choose your model for America
Link: http://www.bopnews.com/archives/001116.html

Excerpt from article:

A lot of companies, until recently, split their giving between the two
parties. Costco and Walmart don't:

  Wal-Mart, the world's largest retailer and owner of Sam's Club warehouse
stores, gives more money to Republican candidates than any other company.
Its top three managers, including chief executive H. Lee Scott, donated the
individual maximum $2,000 to President George W. Bush, and Jay Allen, vice
president for corporate affairs, raised at least $100,000 to reelect the
president, earning him the Bush campaign's designation of ''Pioneer."
  Wal-Mart -- two-thirds of whose 3,580 stores are in the ''red states" that
voted for Bush in 2000 -- is backing White House policies on everything from
trade to limiting overtime pay.

  Costco chief executive Jim Sinegal, 68, is a Democrat who says Bush's $1.7
trillion in tax cuts unfairly benefit the wealthy. He opposed the Iraq war
and supports Democratic Senator John Kerry of Massachusetts for president.
And he's the only chief executive of a company in the Standard & Poor's 500
index to donate money to independent political groups formed to oust Bush,
Internal Revenue Service records show.

Why such a difference? Well perhaps because Democratic policies favour
companies that pay and treat their employees well and Republican policies
favour companies that pay and treat their employees badly:

  The differences are based on more than ideology: Each retailer has a stake
in the election's outcome in areas from healthcare to the minimum wage to
the way unions can organize workforces.
  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 healthcare 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 may benefit Costco and hurt Wal-Mart.

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

  Wal-Mart's health plan for its 1.3 million US 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

  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.

  Bentonville, Ark.-based Wal-Mart supports the Bush administration's
expansion of free-trade agreements and its bid to curtail the number of
workers eligible for overtime pay, according to its lobby disclosure

  Wal-Mart has benefited from the president's opposition to raising the
minimum wage, since some employees make less than $7 an hour, and from the
Republican-controlled Congress's reluctance to make it easier for workers to
unionize. Wal-Mart has no unions; about one-sixth of Costco's workers are
represented by labor groups.

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