This Atlantic piece on Trader Joe’s and the importance of paying high wages to retail employees isn’t the dumbest thing ever written on the subject. But it’s not the smartest, either. Sample analysis:
Keeping shelves stocked and helping customers find merchandise are key to maximizing sales, and it takes human judgment and people skills to execute those tasks effectively. To see what happens when workers are devalued, look no further than Borders or Circuit City. Both big-box retailers saw sales plummet after staff cutbacks, and both ultimately went bankrupt.
Yup, Borders and Circuit City went bankrupt because they didn’t pay Costco-level wages. There wasn’t anything else happening in their space AMAZONAMAZONAMAZON which disrupted their business models. Come to think of it, low wages are probably what killed Blockbuster, too.
You may recall that Megan McArdle wrote about employee wages and the Costco vs. Wal-Mart question last year. It’s so smart, actually, that it makes you wonder how the Atlantic could even run its piece.