The logic behind Walmart’s low wages–the average front-line employee makes about $8 an hour–is that the company can’t afford to pay its workers higher wages and keep its prices low. This is also the argument behind why Walmart offers little in the way of benefits, particularly to its part-time workers, who aren’t offered health insurance. Even many of the company’s full-time workers don’t get health care because they can’t afford it. Walmart employees rely upon as much as $1 million worth of public benefits per store in order for employees to survive on the company’s low wages.
But what if this logic were proven faulty? What if a company paid its workers $11 an hour, gave full health benefits to anyone who works at least 24 hours a week and paid into a pension plan for workers at an amount equal to 20% of their yearly pay?
If it runs the company wisely, as Boise, Idaho, based WinCo is run, then it would be able to offer lower prices than Walmart. WinCo is an employee-owned grocery store chain that is nearing 100 stores and almost 15,000 employees. The higher wages and benefits have led to low turnover–the average hourly worker stays with the company more than eight years–which has led to better employee performance and customer satisfaction.
WinCo also takes specific steps to lower prices. According to the Idaho Statesman, the company doesn’t use distributors, rather using its own trucks to get goods in bulk, achieving a 10% to 50% discount. Customers also bag their own groceries, cutting down on personnel costs. The chain doesn’t take credit cards so it can avoid paying processing fees. And it cuts back on merchandising stands and displays.
Costco, another Walmart rival, also is able to treat its employees well and make healthy profits, according to the Motley Fool. In the first quarter of 2013, Costco’s profits were up 19%.