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Mark Shields is a nationally known columnist and commentator.

Treating workers justly pays off


Wal-Mart Stores Incorporated
Fringe Benefits
Corporate Management
Health Treatment

WASHINGTON (CNN) -- Abraham Lincoln, the first and greatest Republican president, and the man who held this nation together during its bloodiest and darkest hours, would not be tough enough to survive in 2005 on Wall Street.

It was Lincoln who said: "Labor is prior to, and independent of, capital. Capital is the fruit of labor and could not exist if labor had not first existed. Labor is the superior of capital and deserves much the higher consideration."

Lincoln's values are 24-karat heresy to the contemporary "Street." Take the case of Costco, the membership wholesale company, that in retailing is a tiny David to the Goliath of Wal-Mart.

Costco pays its full-time workers an average of more than $16 an hour, while also picking up 92 percent of the cost of employees' health-insurance premiums.

Wal-Mart pays its employees $9.69 an hour and 34 percent of workers' health-care costs. Fewer than half of Wal-Mart's employees qualify for the company health-care plan, but 82 percent of Costco workers are covered.

But as Stanley Holmes and Wendy Zellner of that notoriously socialistic publication, "Business Week," discovered, Costco's employee turnover is one-half that of Wal-Mart and employees at Costco outsell their Wal-Mart counterparts by $279 per square foot.

Good hearted and tough minded are not mutually exclusive in labor-management relations. That's the judgment of Costco CEO Jim Senegal, who has stated: "We pay much better than Wal-Mart. That's not altruism. That's good business."

But not in the cold-eyed analysis of Wall Street, which after a quarter when Costco posted a 25 percent gain in profit rated Costco's stock 4 percent lower.

Deutsche Bank analyst Bill Dreher explained the investment sector's reasoning to Holmes and Zellner: "At Costco, it's better to be an employee or a customer than a shareholder." The Market is not buying any of that Honest Abe ethic about "labor (being) the superior of capital and deserv(ing) much the higher consideration."

American Rights at Work, a labor policy and advocacy group, has just published a study that salutes Costco and eight other successful partnerships between employers and their employees' labor unions that are working well in the global economy (one out of six Costco employees belongs to a union -- no Wal- Mart worker does).

Employers were recognized for collaborating with workers to increase productivity and profits, for their contributions to the larger community, and for providing worker-friendly benefits, paying fair wages, and promoting worker health and safety.

Cingular Wireless Corp., the Harley-Davidson Co., Kaiser Permanente and Catholic Healthcare West are among the employers saluted by the chair of American Rights at Work, former Rep. David Bonior, D-Michigan, for initiating "constructive and considerate compensation policies that work for their bottom lines, their employees and their customers."

The race to the bottom in wages and employee benefits may not be any smarter than it is humane. Respected University of Pennsylvania labor-management professor Peter Cappelli made that point in analyzing U.S. airlines on PBS's "NewsHour With Jim Lehrer": "Southwest Airlines, which is seen as the low-cost carrier, now has the highest-paid pilots in the industry. Delta, which is the carrier probably in the most trouble, is largely non-union. US Airways, which is a carrier that's almost completely unionized now, has the lowest cost structure in the industry. Try to make sense of this."

Here's one possible explanation: Flying Southwest is a positive, pleasant experience -- made so by airline employees who are competent, upbeat and helpful. Might it be the way they are treated by management?

Contradicting the dog-eat-dog Darwinism favored by the economic buccaneers, treating employees justly and humanely turns out to be good business indeed.

Click here for more from Creators Syndicate.

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