Column of the Day: Worstall on Wal-Mart v. Costco

At TCS Daily, Worstall dissects nicely (bolds are mine):

….. what’s getting missed is that little something that we in the real reality-based community have been trying to point out to the minimum and living wage fanatics for decades. When the price of something is raised people use or buy less of it. Now, we’ve been told endlessly that this isn’t true, that raising the minimum wage won’t mean job losses, or reductions in hours on offer, that companies will simply use their labor force “more efficiently”.

….. The proof of this contention? The difference between WalMart and Costco in how much they pay their workers and how many workers they use. Costco does pay more; it also uses about one quarter of the number of employees.

….. It’s been a number of years since I lived in the US but Costco is the place where you drag that 50lb bag of rice to the door yourself, right? WalMart is the one where cheery souls are employed solely to bid you good day as you enter? So, in theory, we could in fact get WalMart to pay the same as Costco by making similarly efficient use of labor: that is, firing between two thirds and three quarters of their staff.

….. We could even look at the profit made per employee: $9,000 at Costco, $7,700 at WalMart. If we were of a Marxist cast of mind, seeing profit as purely and solely the surplus value extracted from the labor of the worker, we would thus say that Costco is even more exploitative than WalMart, would we not?

Do read the whole thing.