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Megan McArdle

Why Wal-Mart Will Never Pay Like Costco

The two stores' retail models are not alike. That's not a bad thing.

I found this link to my old employer on one of our many local housing blogs this morning. It's an old piece on the high wages paid by Trader Joe's, Costco and a handful of other outlets. The text in the link: "A not-so-subtle message for Wal-Mart: Big retailers can pay decent wages and thrive. [Atlantic]" Here's a clip from the article:

Wal-Mart is trying to move into Washington, a move that said local housing blog has not enthusiastically supported. Hence, we've been treated to a lot of impassioned reheatings of that old standby: "Costco shows it's possible" for Wal-Mart to pay much higher wages. The addition of Trader Joe's and QuikTrip is moderately novel, but basically it's the same argument: Costco/Trader Joe's/QuikTrip pays higher wages than Wal-Mart; C/TJ/QT have not gone out of business; ergo, Wal-Mart could pay the same wages that they do, and still prosper.