http://finance.yahoo.com/blogs/daily-ticker/whole-foods-ceo-why-pay-employees-more-131203168.html I thought this was an interesting article for several reasons, mainly due to the opposing political belief systems that seem to be working, dare I say it, together. Whole foods, by many standards is a "hippie pony-tail" liberal type business that swears by the whole organic mantra. WF firmly believes in paying their workers a wage where those workers can afford the product. As a side note, I do tend to believe in *some* of the organic philosophy, for example - grass fed organic beef simply tastes better. Seriously. I am a steak lover and there's something there - I think its the fact that cow isn't bombarded with hormones and antibiotics, e.g. its a healthy animal. Organic tomatoes also taste better IMO. Anyhow, here we have a capitalist, public Co. with a solid stock price and growth. So we're on track with conservative market driven forces. Obviously the market like this Co since its trading near a record high. BUT... they're paying more for labor than they have to. What say the shareholders? Have we found that middle ground that Henry Ford attempted to instill 100 years ago? Responsible capitalism? So lets hear it from the hardcore republicans. Tell me why this wage system is flawed... from the sound of it, WF values its people, pays them well, hence, they end of shopping at their employer and everyone wins... healthy food and a healthy stock price... but, we, as consumers are paying the "real" cost of food (it isn't nicknamed "whole paycheck" for no reason).
I've been to whole foods a few times. The food costs twice as much as anywhere else. High wages work for them because they charge so much more for their food. Henry Ford introduced the $5 wage in 1914 (I believe). The price of a model T that year was $440 which was approximately 22 oz of gold. Today 22 oz of gold costs almost $40,000. So in 1914 for todays equivalent of nearly $40k dollars, you get a car without air conditioning, had 20 horsepower, could barely break 40 mph and got around 13 mpg city. Obviously if your business model affords you high profitability, why not share it with your employees. Today though I think Mr. Ford might not give as much to his employees though as today there are so much things a rich man can buy today that werent available back then. Heck...people were only starting to fly back then, so everywhere you went, it was all driving or horseback, plus I cant imagine there were that many gas stations around and since Mr. Fords cars need to be refilled with gas every 130-200 miles, you couldnt really drive very far out of town.
This is just smart business. There are two costs involved with labor. The hard costs and the soft costs. Hard costs are the concrete expenses that you payout in dollars. The soft costs are expenses that are not readily apparent in employee turnover, employee training, employee satisfaction, errors and mistakes and a general overall negative customer experience and hence less sales. Thus, hence from a Total Costs point of view, the real expenses would come out much cheaper.