# Will The Republicans ever figure out why they lost? **URL:** \ **Category:** Politics & Elections\ **Created:** [December 26, 2012, 9:33pm UTC](https://boards.straightdope.com/t/will-the-republicans-ever-figure-out-why-they-lost/645224 "2012-12-26T21:33:49Z")\ **Posts on this page:** 20\ **Page:** 106
**Author:** ![GIGObuster](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/gigobuster/32/421_2.png) [@GIGObuster](https://boards.straightdope.com/u/GIGObuster)\ **Post date:** [August 9, 2013, 3:42pm UTC](https://boards.straightdope.com/t/will-the-republicans-ever-figure-out-why-they-lost/645224/2101 "2013-08-09T15:42:53Z")
> [@jayjay](#): > > Wow, **adaher** …have you been correct on a factual claim anytime in the last five years or so? Well, I have warned him before to stop relying on the pamphleteers from the right, but he always goes back to rely on the distorted views they have. ---
**Author:** ![jasg](https://avatars.discourse-cdn.com/v4/letter/j/f0a364/32.png) [@jasg](https://boards.straightdope.com/u/jasg)\ **Post date:** [August 9, 2013, 3:45pm UTC](https://boards.straightdope.com/t/will-the-republicans-ever-figure-out-why-they-lost/645224/2102 "2013-08-09T15:45:52Z")
> [@adaher](#): > > The article is ignorant. Labor costs and wages are not synonymous. Costco pays more by employing few. Unless you consider the Harvard Business Review ignorant, here is another [article](http://hbr.org/2006/12/the-high-cost-of-low-wages/ar/1). The title says it all in case you don’t want to read it - “The High Cost of Low Wages”. It concludes with > [@](#): > > In return for its generous wages and benefits, Costco gets one of the most loyal and productive workforces in all of retailing, and, probably not coincidentally, the lowest shrinkage (employee theft) figures in the industry. While Sam’s Club and Costco generated $37 billion and $43 billion, respectively, in U.S. sales last year, Costco did it with 38% fewer employees—admittedly, in part by selling to higher-income shoppers and offering more high-end goods. As a result, Costco generated $21,805 in U.S. operating profit per hourly employee, compared with $11,615 at Sam’s Club. Costco’s stable, productive workforce more than offsets its higher costs. > > These figures challenge the common assumption that labor rates equal labor costs. Costco’s approach shows that when it comes to wages and benefits, a cost-leadership strategy need not be a race to the bottom. ---
**Author:** ![running\_coach](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/running_coach/32/15836_2.png) [@running\_coach](https://boards.straightdope.com/u/running_coach)\ **Post date:** [August 9, 2013, 3:49pm UTC](https://boards.straightdope.com/t/will-the-republicans-ever-figure-out-why-they-lost/645224/2103 "2013-08-09T15:49:54Z")
> [@jasg](#): > > Unless you consider the Harvard Business Review ignorant, here is another [article](http://hbr.org/2006/12/the-high-cost-of-low-wages/ar/1). > > The tile says it all in case you don’t want to read it - “The High Cost of Low Wages”. It concludes with Note the article is from 2006. ---
**Author:** ![jasg](https://avatars.discourse-cdn.com/v4/letter/j/f0a364/32.png) [@jasg](https://boards.straightdope.com/u/jasg)\ **Post date:** [August 9, 2013, 4:03pm UTC](https://boards.straightdope.com/t/will-the-republicans-ever-figure-out-why-they-lost/645224/2104 "2013-08-09T16:03:29Z")
> [@runner pat](#): > > Note the article is from 2006. I doubt that changes much. Costco revenues were $99B and Sam’s Club $54B in 2012, but just in case, here is another, April 2013 [article](http://www.forbes.com/sites/rickungar/2013/04/17/walmart-pays-workers-poorly-and-sinks-while-costco-pays-workers-well-and-sails-proof-that-you-get-what-you-pay-for/) from that left leaning rag, Forbes. It concludes: > [@](#): > > As the old saw goes, you get what you pay for. Costco pays their employees a livable wage and gets sales per employee at double what Walmart subsidiary Sam’s Club gets from their employees who work for lousy pay. > > Maybe the time has come for Wal-Mart to take a lesson from Costco and consider the potential upside of treating employees like human beings. > > It might just prove to be good for business. ---
**Author:** ![Astral\_Rejection](https://avatars.discourse-cdn.com/v4/letter/a/258eb7/32.png) [@Astral\_Rejection](https://boards.straightdope.com/u/Astral_Rejection)\ **Post date:** [August 9, 2013, 4:07pm UTC](https://boards.straightdope.com/t/will-the-republicans-ever-figure-out-why-they-lost/645224/2105 "2013-08-09T16:07:38Z")
Even comparing Costco to Walmart itself, as [I did in this post,](http://boards.straightdope.com/sdmb/showpost.php?p=16556335&postcount=2099) you’ll see that Costco employs more people per store and sees three times as much revenue per store as Walmart does. Paying your workers a better wage truly does seem to pay itself back. ---
**Author:** ![running\_coach](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/running_coach/32/15836_2.png) [@running\_coach](https://boards.straightdope.com/u/running_coach)\ **Post date:** [August 9, 2013, 4:09pm UTC](https://boards.straightdope.com/t/will-the-republicans-ever-figure-out-why-they-lost/645224/2106 "2013-08-09T16:09:59Z")
> [@jasg](#): > > **I doubt that changes much**. Costco revenues were $99B and Sam’s Club $54B in 2012, but just in case, here is another, April 2013 [article](http://www.forbes.com/sites/rickungar/2013/04/17/walmart-pays-workers-poorly-and-sinks-while-costco-pays-workers-well-and-sails-proof-that-you-get-what-you-pay-for/) from that left leaning rag, Forbes. > > It concludes: Actually, it does. The figures from 2006 prove **adaher’s** point of Costco employing fewer while paying more. By this year, CostCo pays more and employs more. The article even points out the reduction in jobs at Walmart. ---
**Author:** ![adaher](https://avatars.discourse-cdn.com/v4/letter/a/dec6dc/32.png) [@adaher](https://boards.straightdope.com/u/adaher)\ **Post date:** [August 10, 2013, 4:02am UTC](https://boards.straightdope.com/t/will-the-republicans-ever-figure-out-why-they-lost/645224/2107 "2013-08-10T04:02:09Z")
> [@jayjay](#): > > Wow, **adaher** …have you been correct on a factual claim anytime in the last five years or so? Quick to jump, aren’t you? Their profile in Yahoo Finance says they employ only 96,000: [http://finance.yahoo.com/q/pr?s=COST+Profile](http://finance.yahoo.com/q/pr?s=COST+Profile) The other links also inflate Costco’s employees, while reducing Wal-mart’s. And my point about the model not scaling up well also still stands. It is hard to get good employees and have systems in place to ensure a productive workplace. Costco will never be a major employer. Now granted, I prefer the model. I used to complain about my most productive employees leaving for better jobs. When you pay near minimum wage, you get near minimum quality. But there’s two reasons why this won’t work nationally: 1) It would render a huge portion of the population permanently unemployable. That disinterested lady at the fast food counter isn’t ever going to work at Costco. Ever. 2) The largest companies have trouble implementing that model. Our own government can’t implement it. Sure, they pay people well, but they haven’t figured out how to get good productivity out of their workforce. If Costco tried to double their stores in five years, their model would break down overnight. ---
**Author:** ![running\_coach](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/running_coach/32/15836_2.png) [@running\_coach](https://boards.straightdope.com/u/running_coach)\ **Post date:** [August 10, 2013, 4:11am UTC](https://boards.straightdope.com/t/will-the-republicans-ever-figure-out-why-they-lost/645224/2108 "2013-08-10T04:11:28Z")
> [@adaher](#): > > Quick to jump, aren’t you? Their profile in Yahoo Finance says **they employ only 96,000:** > > [Costco Wholesale Corporation (COST) Company Profile & Facts - Yahoo Finance](http://finance.yahoo.com/q/pr?s=COST+Profile) > > The other links also inflate Costco’s employees, while reducing Wal-mart’s. Full-time employees. I got the Walmart figures from Walmart’s site. Prove the numbers are wrong. ---
**Author:** ![adaher](https://avatars.discourse-cdn.com/v4/letter/a/dec6dc/32.png) [@adaher](https://boards.straightdope.com/u/adaher)\ **Post date:** [August 10, 2013, 4:39am UTC](https://boards.straightdope.com/t/will-the-republicans-ever-figure-out-why-they-lost/645224/2109 "2013-08-10T04:39:25Z")
Don’t need to. 110,000\>96,000. ---
**Author:** ![running\_coach](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/running_coach/32/15836_2.png) [@running\_coach](https://boards.straightdope.com/u/running_coach)\ **Post date:** [August 10, 2013, 4:45am UTC](https://boards.straightdope.com/t/will-the-republicans-ever-figure-out-why-they-lost/645224/2110 "2013-08-10T04:45:03Z")
> [@adaher](#): > > Don’t need to. 110,000\>96,000. How many of Sam’s Club employees are full time? You claimed the numbers are wrong. Provide the correct numbers. ---
**Author:** ![Astral\_Rejection](https://avatars.discourse-cdn.com/v4/letter/a/258eb7/32.png) [@Astral\_Rejection](https://boards.straightdope.com/u/Astral_Rejection)\ **Post date:** [August 10, 2013, 6:40am UTC](https://boards.straightdope.com/t/will-the-republicans-ever-figure-out-why-they-lost/645224/2111 "2013-08-10T06:40:18Z")
> [@adaher](#): > > And my point about the model not scaling up well also still stands. It is hard to get good employees and have systems in place to ensure a productive workplace. Costco will never be a major employer. I’m feeling a little invisible in this discussion. As I’ve posted twice before: _Assuming for the sake of argument that all Walmart and Costco employees work at a store (incorrect, I know, but a close enough assumption for this purpose), and assuming revenue can be evenly split by store, here’s the figures:_ **Walmart** has 2 million employees in 8970 stores, with 469 billion in revenue. This equals out to 222 employees per store, with an average of 52.2 million in revenue per store. **Costco** , by contrast, has 174,000 employees in 623 stores, with 97 billion in revenue. **This equals out to 279 employees per store, with an average of 155 million in revenue per store.** Going just by the numbers, I don’t see how you can justify a claim that Costco “will never” be a major employer, or that the system can’t be scaled up. Costco is making three times the profit per store that Walmart is… what’s unscalable about that? Have I made an error in calculation or reasoning? It seems fairly cut and dry to me. ---
**Author:** ![adaher](https://avatars.discourse-cdn.com/v4/letter/a/dec6dc/32.png) [@adaher](https://boards.straightdope.com/u/adaher)\ **Post date:** [August 10, 2013, 6:57am UTC](https://boards.straightdope.com/t/will-the-republicans-ever-figure-out-why-they-lost/645224/2112 "2013-08-10T06:57:23Z")
Costco has been a slow expander precisely because it’s hard to expand quickly and maintain quality control. if it can be scaled up, how come no one has done it yet? People slam Wal-mart, but no other company has stepped up like they have to hire 2 million Americans. Costco’s barely at six figures, if that. ---
**Author:** ![Robot\_Arm](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/robot_arm/32/18280_2.png) [@Robot\_Arm](https://boards.straightdope.com/u/Robot_Arm)\ **Post date:** [August 10, 2013, 7:05am UTC](https://boards.straightdope.com/t/will-the-republicans-ever-figure-out-why-they-lost/645224/2113 "2013-08-10T07:05:03Z")
> [@Astral\_Rejection](#): > > Going just by the numbers, I don’t see how you can justify a claim that Costco “will never” be a major employer, or that the system can’t be scaled up. Costco is making three times the profit per store that Walmart is… what’s unscalable about that? Have I made an error in calculation or reasoning? It seems fairly cut and dry to me. I think **adaher** point is that when the bureaucratic and incompetent government can’t implement high pay and productivity, competitive and efficient private enterprises have no chance of doing it either. ---
**Author:** ![elucidator](https://avatars.discourse-cdn.com/v4/letter/e/8edcca/32.png) [@elucidator](https://boards.straightdope.com/u/elucidator)\ **Post date:** [August 10, 2013, 7:45am UTC](https://boards.straightdope.com/t/will-the-republicans-ever-figure-out-why-they-lost/645224/2114 "2013-08-10T07:45:31Z")
And what happens when efficiency is achieved? When Costco and Wal Mart have adapted every innovation effectively, their logistics fine tuned, their warehousing procedures the very model of efficiency…how do they compete, then? What else but labor cost, what else remains? Fewer employees, better paid, working their asses off? More employees, paid like serfs and working in sullen compliance? And the beatings will continue until morale improves? It is a grave mistake to value efficiency for its own sake. It is not a virtue in and of itself, it is worthy as a tool in service to virtue. ---
**Author:** ![adaher](https://avatars.discourse-cdn.com/v4/letter/a/dec6dc/32.png) [@adaher](https://boards.straightdope.com/u/adaher)\ **Post date:** [August 10, 2013, 9:03am UTC](https://boards.straightdope.com/t/will-the-republicans-ever-figure-out-why-they-lost/645224/2115 "2013-08-10T09:03:49Z")
> [@Robot\_Arm](#): > > I think **adaher** point is that when the bureaucratic and incompetent government can’t implement high pay and productivity, competitive and efficient private enterprises have no chance of doing it either. Not exactly. Just that inefficiency is a problem for large organizations that expand too quickly. There’s no way for the effective management to oversee it all. So the management team doubles or triples in a short time, the employee base increases even more, and there’s little effective control over the organization. The way that companies with an expansion at all costs attitude handle this is by just assuming a lot of incompetence and paying very little for it. High wages can attract better talent, but it doesn’t chase away bad talent, which is why you have to rely on the management to be selective. Costco is very selective. If they suddenly had to staff hundreds more stores, they wouldn’t be able to be as selective, and without that high productivity, they’d quickly go bankrupt. Thus their ability to expand is limited. ---
**Author:** ![adaher](https://avatars.discourse-cdn.com/v4/letter/a/dec6dc/32.png) [@adaher](https://boards.straightdope.com/u/adaher)\ **Post date:** [August 10, 2013, 9:10am UTC](https://boards.straightdope.com/t/will-the-republicans-ever-figure-out-why-they-lost/645224/2116 "2013-08-10T09:10:21Z")
> [@elucidator](#): > > And what happens when efficiency is achieved? When Costco and Wal Mart have adapted every innovation effectively, their logistics fine tuned, their warehousing procedures the very model of efficiency…how do they compete, then? What else but labor cost, what else remains? Fewer employees, better paid, working their asses off? More employees, paid like serfs and working in sullen compliance? And the beatings will continue until morale improves? > > It is a grave mistake to value efficiency for its own sake. It is not a virtue in and of itself, it is worthy as a tool in service to virtue. Costco doesn’t compete with Wal-mart except locally. That’s like saying that North Korea is a competitor to the US. Target is an actual competitor of Wal-mart’s, not jut nationwide, but in Canada too. Let’s also keep in mind who Costco exists for: not poor people. They didn’t even except food stamps until 2009, and their oh so concerned about the working class CEO said, “Generally we don’t have customers on food stamps”. Wal-mart, by contrast, caters especially to poorer Americans, which is one reason they have to pay so little. You can pay more when you’re being patronized by yuppie liberals willing to pay membership fees. ---
**Author:** ![Gyrate](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/gyrate/32/3588_2.png) [@Gyrate](https://boards.straightdope.com/u/Gyrate)\ **Post date:** [August 10, 2013, 9:22am UTC](https://boards.straightdope.com/t/will-the-republicans-ever-figure-out-why-they-lost/645224/2117 "2013-08-10T09:22:19Z")
So…your argument is that rapid uncontrolled inefficient business growth is preferable to a more measured approach? Or that pretty much every business is run by idiots and that healthcare costs would eat into their idiotproofing margin? Man, I thought our side had a ruthless view of business but you seem to think that nobody can manage their business properly at all. ---
**Author:** ![Gyrate](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/gyrate/32/3588_2.png) [@Gyrate](https://boards.straightdope.com/u/Gyrate)\ **Post date:** [August 10, 2013, 9:26am UTC](https://boards.straightdope.com/t/will-the-republicans-ever-figure-out-why-they-lost/645224/2118 "2013-08-10T09:26:19Z")
> [@adaher](#): > > Wal-mart, by contrast, caters especially to poorer Americans, which is one reason they have to pay so little. You can pay more when you’re being patronized by yuppie liberals willing to pay membership fees. And you can pay less when your employees’ salaries are being subsidized by the government in the form of food stamps and other benefits. Otherwise your business model fails catastrophically. ---
**Author:** ![Robot\_Arm](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/robot_arm/32/18280_2.png) [@Robot\_Arm](https://boards.straightdope.com/u/Robot_Arm)\ **Post date:** [August 10, 2013, 9:43am UTC](https://boards.straightdope.com/t/will-the-republicans-ever-figure-out-why-they-lost/645224/2119 "2013-08-10T09:43:34Z")
> [@adaher](#): > > Not exactly. Just that inefficiency is a problem for large organizations that expand too quickly. There’s no way for the effective management to oversee it all. So the management team doubles or triples in a short time, the employee base increases even more, and there’s little effective control over the organization. The way that companies with an expansion at all costs attitude handle this is by just assuming a lot of incompetence and paying very little for it. High wages can attract better talent, but it doesn’t chase away bad talent, which is why you have to rely on the management to be selective. Costco is very selective. If they suddenly had to staff hundreds more stores, they wouldn’t be able to be as selective, and without that high productivity, they’d quickly go bankrupt. Thus their ability to expand is limited. You’re absolutely right, Costco is doomed to be a mom-and-pop operation forever. They’ll be lucky if they even get to 200,000 employees. ---
**Author:** ![ElvisL1ves](https://avatars.discourse-cdn.com/v4/letter/e/5daacb/32.png) [@ElvisL1ves](https://boards.straightdope.com/u/ElvisL1ves)\ **Post date:** [August 10, 2013, 10:49am UTC](https://boards.straightdope.com/t/will-the-republicans-ever-figure-out-why-they-lost/645224/2120 "2013-08-10T10:49:49Z")
> [@adaher](#): > > Costco doesn’t compete with Wal-mart except locally. It seems you’re not quite aware of who own’s Sam’s Club. That’s a pretty basic concept for this discussion. [Previous page](https://boards.straightdope.com/t/will-the-republicans-ever-figure-out-why-they-lost/645224.md?page=105) [Next page](https://boards.straightdope.com/t/will-the-republicans-ever-figure-out-why-they-lost/645224.md?page=107)