The Bulletin

Costco's CEO becomes a progressive hero, Internet meme

Posting in Food
Activists are celebrating worker compensation at CostCo.
Activists are celebrating worker compensation at CostCo.

A CEO is an unlikely hero for progressive activists, but the left has canonized Costco's James Sinegal with an Internet meme celebrating his reputed fairness with his workers' wages and benefits. A new ‘celebrity CEO' was born from demands for social justice.

The Sinegal meme touts Costco employees being paid US$17 per hour on average along with benefits while Sinegal earns less than $500,000 annually, resisting shareholder pressure to nickel and dime Costco employees. That's not exactly right - in 2011 he earned a base salary of $350,000, and with all additional compensation, his income totaled $2,191,159, according to a company proxy statement.

Regardless, the ratio of Sinegal's pay to worker pay is far less than data showing CEOs in the U.S. earning 209.4 times more compensation than their employees. That means there's less income inequality at Costco, and workers take home a living wage. In contrast, Walmart's CEO brings home $35M annually, which some allege is more per hour than most Walmart workers will ever make in a year. It has been fined by the Department of Labor for violations including denying workers overtime pay and has been accused of gender discrimination.

Make no bones that the meme's intention is to draw a comparison between Sinegal and Costco against Walmart. Walmart was embroiled in "black Friday" demonstrations by labor unions and a few striking employees that followed suit. There is even more action on the Web - it's another labor battlefield. This meme is an example of that. It's ammo, even if it's intended to give some acclamation to Costco.

You can easily find articles and blogs where activists allege that Walmart is a significant driver behind the growth of Americans who receive food stamps, and there's a Berkeley study that found that the average worker at Walmart receives $730 in Medicaid and $1,222 in other government assistance to meet basic household needs. Low wages and prices have hidden costs, Walmart's critics say.

Henry Ford was famous for wanting his workers to be able to afford to buy the cars that they built and believing in innovation - instead of obsessing over narrow profit margins. Is Costco in the right and WalMart in the wrong, or is Walmart actually making market driven choices? We'd like to hear from you.

Update: NBC political reporter Tony Tull has snapped a picture of Vice President Biden shopping at the grand opening of a Costco in Washington, D.C.

(Image credit: The Other 98%, David Worthington)

— By on November 28, 2012, 12:14 PM PST

David Worthington

Contributing Editor

David Worthington has written for BetaNews, eWeek, PC World, Technologizer and ZDNet. Formerly, he was a senior editor at SD Times. He holds a business degree from Temple University. He is based in New York. Follow him on Twitter. Disclosure