Costco certainly looks like a better place to work than Wal-Mart, although
it does not take much for that to be true. But is Costco more attractive to
big money that cares only about making more money? The Business Week
article tries to make it seem so, with the implication that good treatment
of workers is good business, too. However, over the last five years,
Wal-Mart has exceeded Costco on these ratios that matter to investors:
Return on equity: 40% to 80% higher
Return on assets: 35% to 60% higher
Return on invested capital: 16% to 50% higher
Operating profit margin: 50% to 75% higher
Reinvestment rate: 20% to 50% higher
(Source: Thomson Financial)
In other words, businesses make money by sweating the most they can out of
employees, and a comparison of Wal-Mart and Costco is no exception.
Charles Andrews
http://www.laborrepublic.org
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