Wal-Mart's Wage Experiment Works ... for Workers - Bloomberg View

Wal-Mart's Wage Experiment Works ... for Workers - Bloomberg View



...Costco provides bulk goods to a relatively affluent demographic that does not do the majority of its shopping there; Wal-Mart is a full-service department store where a lower-income demographic expects to buy the bulk of its daily necessities. 



Because it needs to be everything to its core customers, Wal-Mart’s stores carry about 25 times the number of individual products (different brands, as well as different sizes) than Costco stores do. This makes Wal-Mart's business vastly more labor-intensive, which in turn means that the company needs to worry more than Costco does about controlling hourly wage costs, and it gets less reward out of paying for skill and experience, because ultimately, there’s an upside limit to how much extra productivity you can wring out of clever, hardworking people engaged in the task of putting things on shelves.