The Ed Show | November 29, 2012
>>> have my own card. jill wouldn't let me have one.
>> he's a regular old joe at the store, right? joe biden , vice president. earlier today, baembarking on a shopping spree at the discount warehouse, costco . to demonstrate a surge in consumer confidence , biden flashed his membership card and picked up a few items including flowers, children's books, fire logs , 32 inch panasonic tv. and a large apple pie . biden tried to -- tried some free samples as well. he chatted with employees and shook hands with shoppers. the visit to washington, d.c.'s, first costco store provided a great opportunity for the vice president to push for an extension of the middle class tax cuts .
>> look around here. people are -- consumer confidence is growing. and the last thing we need to do is dash that now by being unable to extend the middle class tax cuts . thanks for shopping with me.
>> thank you.
>> i know you won't tell anybody what i bought for christmas.
>> it's important to note some costco executives have ties to the democratic party . the wife of costco co-founder jeff brattman is an obama bundler. the co-founder is a longtime democratic donor who defended president obama 's economic record at the democratic national convention . but his business model has always been on the side of the worker, unlike walmart and sam 's club with its history of union busting , low wages and benefits. sinigal says treating employees well is good business. costco pays itself workers more, too. costco cfo, richard galanti told "the ed show" employees get $20.50 an hour on average, that's about 40 grand a year. health benefits are offered to full and part-time employees with workers paying only about 10% of their premiums out of pocket. let's turn to steve greenhouse, labor and workplace reporter for "the new york times" and the author of "the big squeeze." great to have you here tonight, mr. greenhouse. what do you make of the symbolism, and i believe it's symbolism that the vice president went to costco today to make a statement about the middle class but also how to treat workers.
>> i think it's a twofer or threefer for biden and the white house . it's important to go out and shop, important to stimulate the economy. if we're going to pick a store, let's go to costco which is known for treating its workers better than basically any general retailer in the country. i've been covering labor for a few years for "the new york times" and a few years ago, several people were saying, you should take a look at costco . they really do remarkable job in how they treat their workers. so i went out to their headquarters in washington. i spent a day with that gentleman next to biden , mr. seni fwrks senigal, co-founder of the company. his father was a steelworker. he grew up in pittsburgh. i figured he was sympathetic to unions. he grew up catholic. he said, no, no, that's not why i treat our workers well. we're not the little sisters of the poor . he said it's good business. he said treating workers well mean they work hard for you, there's far less turnover. the typical costco worker who's been there more than a year stays on average 17 years. costco is known for having far less theft than most retailers. and he says when someone has to put the huggies on the shelf in the middle of the night they know exactly where to put it unlike some other companies where there is huge turnover and every six months you have new employees.
>> let's talk about that turnover. they do not have the turnover the other retailer has, walmart and sam 's club. but walmart and sam 's club makes more money than costco . so it's a philosophy here that we're seeing play out. big can be better if it's done right.
>> yes. we often talk about high roads and low roads. and senigal, when i interviewed him, he said, i asked him, why do you treat your workers so well? he said, we have rock-bottom prices. the last thing i want is shoppers to come in and think, senigal, you're running a sweat shop , you pay your workers like dirt. he said, therefore, i'm going to pay my workers the best of any retailer in the country. so he's able to do that by getting the workers to work really hard. he has all these kind of retailing tricks, you know, he saves money. you go into a costco , you know, it's not fancy. there's cement floors. he spends no money on advertising. most retailers spend 2% of their revenues on advertising. that enables him to cut costs. he's very ingenious in how he stocks the store.
>> how do they compare in walmart , i mean, in operation?
>> the typical costco warehouse sells around, i think around twice as much as the typical sam 's club per square foot . and jim senigal is always proud of that. he said there might be a dispute about who charges less but there's no dispute in how they treat their workers.
>> this is the perfect play for the obama team to go to a big retailer like this when consumer confidence is up. middle classers all over the place. to talk about these tax cuts . to show that this is where people shop. this is how you treat workers. i mean, it really is the perfect -- the perfect presentation for the obama team at this point.
>> in many ways you're right. last week i was covering these protests at walmart and i interviewed numerous walmart workers who said we've been there three years, five years, ten years, making $8, $9, $10, $11 an hour. you just put up that number. at costco , if you work there 4 1/2 years you're making generally $0.50 an hour. and then they kick in another $4,000, $5,000 to your 401(k). an amazing thing is the typical costco worker there 4 1/2 years is making as much as the typical walmart assistant store manager .
>> steve greenhouse, "new york times." great to have you with us tonight. thanks so much.
>>> there's a lot more coming up in the next half hour of "the ed show." stay right with us.
>> it's over.
>> no more twinkies?
>> this is it.
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>> this administration sent planes and