Costco pays workers around $20 an hour, roughly 50% more than Walmart. Sam Parr argues the higher wages boost productivity without cutting profits, following a strategy Sol Price and Henry Ford used: pay workers enough that they become your customers.
Costco pays 50% more than Walmart pays its employees. Lowest wage is like $20 an hour. They get a lot of productivity out of their people because of that. It hasn't hurt their profitability. In fact, Sol Price's view was similar to Henry Ford's view that I want the people who work in my stores to be able to shop in my stores. Just like Henry Ford said, I want my workers to be able to buy my cars. You know, at that time, there were cars where automobiles were for the rich, right? And Henry Ford said, no, I want them for everyone, right? So he wanted to drop the price.
