>More information from Business Week below. I'm surprised that the higher
>retention rate and productivity at Costco actually makes as much
>difference as reported at this skill level, where retraining costs can't be
>that high, and the largely passive sales force is mostly there to help
>customers find products. But I guess it does - that, and the lower marketing
>costs and its somewhat more affluent customer base.
I'm always skeptical of these higher wages = higher productivity arguments. Wal-Mart transformed retailing, and was responsible for sparking about a quarter of the productivity acceleration from the mid-1990s. (For details, see the new afterword to After the New Economy, coming in paperback from The New Press in a few weeks.) If they thought raising wages would raise productivity, they'd do it. Culturally they're a bunch of yahoos, but they know what they're doing with the business.
Doug