Minimum Dignity

One of the companies I admire most is Costco.  They’re not very environmental, unfortunately, but they are extremely dedicated to their employees.  Back in 2008 when the economy was in a downward spiral, Founder and CEO Jim Sinegal said that instead of looking for ways to cut costs and reduce compensation like most companies were doing, it was especially important to find ways of supporting their staff in this time of hardship.  He said, “our employees… deserve our loyalty.  They needed it just as much [in 2008] as they ever did, or more.”  Costco’s average pay rate is $21 per hour, while BJ’s average is $11 and Sam’s Club’s $12.  However, Costco is the performance leader in the club membership retail sector.

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MOM’s Employees touring a recycling facility

Here at MOM’s, we’ve never paid minimum wage.  In June of 2011, MOM’s raised our minimum wage from $9 per hour to $10.  This month, we will raise it to $11 per hour.

This is not an act of charity, but rather an investment. Without a doubt, our most valuable asset here at MOM’s is our people.  Paying them more is a smart business strategy.  Any good businessman knows there is no higher ROI (return on investment) than investing in people.  Great people are more efficient, have good ideas, and have good judgment.  Customers love shopping at places with good employees.  I’d rather have 1 great than 3 decent employees.

Raising the minimum wage would also raise the “status” of retail jobs, making them more viable as a career choice rather than short-term or a necessity.  But raising the minimum wage is the right thing to do for so many other reasons:

  • There is the issue of fairness.  A parent with 2 kids who works full time at the minimum wage lives below the poverty line.  For all of the complaining people do about those who don’t pull their own weight, it is hypocritical of such people to oppose raising full time workers above the poverty line.
  • Similar to a child who struggles in school because he has a tough home life, I believe that when people are stressed in their personal lives, it negatively impacts their work performance.  Raising the minimum wage will improve worker performance unilaterally, as basic needs are met.
  • The existing minimum wage leads to corporate welfare.  Large retailers like Walmart and McDonald’s pay minimum wage.  Many of their employees, even though they’re working full time, are on government assistance programs.  Basically, the entitlement programs that people complain so much about subsidize the low-paid employees of large corporations.  If you want to shrink the government, make the corporations pay a fair wage.  For example, raising the minimum wage to $10.10 will reduce between 3.3 and 3.8 million people from enrolling in the tax payer funded Supplemental Nutrition Assistance Program (SNAP).  Other public programs such as Medicaid, EITC, and TANF would be similarly affected.
  • Paying the low and lower-middle class a higher wage will immediately help the economy.  If you give more money to rich people, they’re not going to spend it.  They’ll horde it.  When money lands in the hands of minimum wage earners, consumption immediately increases.  As they say, “a rising tide lifts all boats.”
  • I read a great quote recently from a CEO of a company- “For CEOs to take credit for job creation is like a squirrel taking credit for evolution.”  I won’t hire anyone unless people buy our product.  The consumer is solely responsible for job creation.  Contrary to what many CEOs in opposition are claiming, raising the minimum wage will actually create jobs, not cut them.

$11 an hour is just the next step for us here at MOM’s- and as we continue to improve our workforce, we will continue to raise wages even higher.

Virginia Senator Tim Kaine perfectly outlines the case for raising the minimum wage (and at 2:56, mentions MOM’s!).

When I started MOM’s almost 27 years ago, I used to think that I could do everything the best and that the handful of employees I had were there to simply take instructions and do what I say.  This past decade or so, I’ve come realize that not only was I wrong about that, but that I play a rather insignificant part in MOM’s success.

The people here at MOM’s have accomplished great things.  They’re smart, dedicated, and they move MOM’s forward, helping to accomplish our Purpose to protect and restore the environment.  They have taught me to have great faith in people and to understand their value.

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17 Responses to Minimum Dignity

  1. Catherine Turner says:

    I disagree, Scott. It is your vision that makes Mom’s and the people you employ the best in the business. You restore everyone’s faith in the human race.

  2. Maggie says:

    Please open a store in Bethesda!

  3. swmohan says:

    I want to work for you! When are you opening the Rotunda store in Baltimore?

  4. i don’t know scott. won’t this just make everything more expensive for everyone? the cost of increased wages doesn’t disappear so margins decrease. and the poor are the most price sensitive.

    • Michael Karpman says:

      I vehemently disagree, Mickey. You are repeating a right wing talking point, one that is patently false. Would you say the same thing if Scott said he was investing in a new and better refrigeration system? People are a business’s most valuable asset. Higher wages mean that you attract a higher quality people to work in MOMs. It means they feel more valued and are thus more motivated. They do a better job of keeping the store stocked, keeping produce fresh, providing customer assistance, and a multitude of other things that make for a successful business. Not only that employees that have more money will often spend it on high quality food, so some of the increase in wages will come right back to MOMs in sales. Finally, higher wages means less turnover in employees. There is a cost in training new employees and thus a savings when you retain a high quality staff.

      All in all, Scott is not only doing the morally correct thing, but it is smart from a business point of view. Keep up the good work, Scott.

  5. John Tomlin says:

    Increased wages do not necessarily increase company costs. Better paid, better lead workers are more productive and more creative, and will increase both output and product quality. Big behemoth companies want to perpetuate the myth that wage increases will cost jobs. I have never seen data that supports this. Take a look at the writings of former Secretary of Labor Robert Reich. he nails the subject pretty well.

  6. lezrtst says:

    Hello Scott, I applaud your efforts to improve the lives of all of us through conscientious business practice. However, I echo the call for a Baltimore store. The chance for working class families to access organic and fresh fruits and vegetables is primary and is ignored by a lot of grocery stores. We need to address the imbalance.

  7. Bill Samuel says:

    I agree with the importance of paying workers a decent wage.

    With regard to Costco, they are very good on paying their employees but their whole business strategy is terribly classist. The model they use – you have to pay an annual fee – is designed (I’ve seen statements from company officials which verify the intent) to keep the poor out of the store. Poor people live from day to day, and can’t front $55 to buy at a low-cost store. Furthermore, the model produces the effect of the more you are able to pay, the less you pay. If you are rich and buy lots of stuff, the $55 is spread over so much that it doesn’t really make much of an impact on the effective price. If you don’t buy so much, it has a significant impact on the effective price. Costco is a store for the wealthy, which makes me really mad that Montgomery County paid $6 million to build Costco’s store, and didn’t even demand free memberships for taxpayers.

    I’m glad you don’t use Costco’s class discrimination model, and that you are much more sensitive to environmental concerns.

  8. Chessie says:

    What an excellent article, and you make some very good points. Good for you for paying a living wage to your employees. It’s another part of what makes relatively non-affluent people like me shop at MOM’s: the decency all around.

  9. Janis says:

    Excellant article. I shop at the Berwyn and Bowie stores frequently and I have to say your employees are the best!! Hands down. I shop at Costco and am pleased to hear that they treat their employees well; yet I get no particularly special if any customer service there. At MOM’s the employees go out of their way to help you in a gentle friendly manner. They all seem happy to be working there and proud of the store. Please Please Please do all you can for them. Bonuses, benefits, whatever! They deserve it. Honestly, I have shopped there for years — shortly after Beautiful Day closed — and every, absolutely every employee has been superb! So, what I am saying is that I encourage you to set a goal to surpass Costco in good treatment and going out of your way to reward your employees even if you do not have to — they support your goal and work there even though they could make more money at Costco.

  10. Rita says:

    Very interesting and well written article!

  11. Reblogged this on Farmstead Lady and commented:
    There are many reasons why I like shopping at MOM’s and the character of their CEO is no added to that list of reasons.

    Appreciate reading his perspective on the economy.

  12. Troy Clure says:

    Wrong. If employees want a higher wage/salary, then they need to acquire the skills and education necessary to obtain a better job. No one is owed anything in this country and it is the expectation of entitlement that keeps people from success. You and you alone responsible for your failures and success, not the government or business. Raising the min wage take the incentive away for people to move on past the entry level position that was never meant for people to live on in the first place. This is America, not Cuba or Mexico.

    • John Tomlin says:

      You might as well head back to the 19th century with thinking like that. We’re not talking about continuous wage increases across the board. We’re talikng about a MINIMUM wage that will allow people to live above the poverty level, with some dignity. I do not see how a living minimum wage will reduce anyone’s desire to improve and advance. My guess is that you’d also like to eliminate all sorts of social safety net programs because they “reduce incentive.” Try being homeless and hungry for a while, you’ll see what it’s like.

    • Michael Karpman says:

      Troy, please read my reply to Mickey above. You are buying into propaganda put out by right wingers such as Fox News. It makes no sense from a business point of view. It is a foolish short term outlook based on greed.

      Henry Ford, that famous socialist millionaire figured this out almost 100 years ago. He paid his employees a higher minimum wage than almost any other business man. He said, that it made sense from a business point of view to pay his workers well enough that they could afford to buy the cars he was selling.

      Scott is demonstrating that not only does he have a good heart, but good business sense.

  13. Pingback: Why MOM’s Sells Eden’s | MOM's Organic Market

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