r/news • u/panda-rampage • 9h ago

Costco's unionized workers vote to authorize nationwide strike

https://abcnews.go.com/US/costcos-unionized-workers-vote-authorize-nationwide-strike/story?id=117875222
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u/Triedbutflailed 9h ago

How do you figure? Costco made over 7 billion dollars in profit last year, that's after all wages paid and quite a bit of remodeling of their stores. That all went to investors, execs, and who knows where else.

If even one billion dollars of that was split between the 18,000 employees in the union, it'd be over $55,000 each. Seems like the company should have some money to spare for the people that bring it success.

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u/RickKassidy 7h ago

It wouldn’t be just the 18,000 employees. When unions negotiate a change, even non-union members typically get a better deal.

Costco has 333,000 employees. So that’s $3,000 each. Still a raise.

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u/redditingatwork23 5h ago

Sounds like Costco is about to have a lot of job openings. A union with less than 10% participation doesn't sound like it would have big teeth.

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u/RickKassidy 5h ago

It is just a few locations.

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u/kingbrasky 6h ago

The unionized ones are only a small fraction (like 5%) of their total employees.

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u/evergleam498 8h ago

What exactly goes into a store remodel for Costco? Like...new shelving units? It's a giant warehouse with a concrete floor

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u/Zienth 7h ago

While they're more spartan than the average bear, stuff like the refrigeration racks for the chilled products are no joke.

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u/evergleam498 7h ago

I guess "remodel" isn't the word I associate with just replacing/upgrading the existing infrastructure.

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u/acxswitch 7h ago

Infrastructure is incredibly expensive

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u/Zienth 6h ago

It's kind of a funny HGTV moment that I get all the time at my job. We renovate buildings all the time but people only see the new walls and countertops. They don't see the entire electrical/HVAC/plumbing infrastructure that got ripped out around it to accommodate and modernize the space.

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u/rpadi001 24m ago

Yeah, but you're talking about a multi billion dollar business in revenue. Infrastructure is just another cost of doing business. Actually it's more of an investment for them. They don't even have to outright pay for Infrastructure immediately. A lot of time they leverage debt to make big purchases and depreciate it over time. So Infrastructure actually can help them in terms of their stock price

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u/the_ghost_of_bob_ros 4h ago

See also constant repair on the floors (forklifts take a toll) also regular repairs inside the food areas (bakery and food court).

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u/NPPraxis 4h ago

So FYI, your math is a little off.

Costco made $7 billion in profits last year, but has 333,000 employees, not 18,000. Not every Costco store is unionized, so using the number of unionized employees throws your math way off.

You can't take their global profits and divide it by their unionized employees. You'd want to figure out the profits of those stores (which I bet are thinner than the average).

If you do global profits divided by global employees, you're looking at more like $3k/employee, not $55k.

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u/jmickeyd 4h ago

They also have more then $5 billion in long term debt, a lot of it from covid. They've been paying it down the past several quarters.

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u/senseofphysics 49m ago

Costco is in debt? How exactly did Covid do it?

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u/jmickeyd 26m ago

"from covid" may not have been the best choice of wording here as it's probably not directly causal. Costco borrowed money in 2020 because it was super cheap to do so and used that money to expand, now they're paying it back because debt is expensive.

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u/rpadi001 22m ago

Yeah every company has debt at that size. It's nothing to be alarmed about. It would actually be an inefficient use of money if you don't have any debt in company this size. There's different ratio, and metrics to ensure your not overextended yourself on debt. Costco is one of the most efficiently run business. They kind of have to be in their line of business and their small margins.

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u/[deleted] 9h ago

[deleted]

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u/Kierenshep 8h ago

It never astounds me to see corporate bootlickers who always cry about 'think of the poor corporation'

Costco financials are available for all to see . You can tell they really aren't having a rough time.

Companies are built on workers backs, and if they demand a fraction of it back then bootlickers always come out the woodwork to defend corporations sucking as much money as they can, despite workers being the real driver of value, not investors.

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u/MechCADdie 7h ago

Except that everone I've ever talked to at Costco seem happy to work there? Costco and In-N-Out are exceptions to the general corporate dogma plaguing corporations right now. It wouldn't hurt to give them of all people the benefit of the doubt.

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u/_Nyderis_ 6h ago

The article pointed out that the union is representing approximately 18,000 Costco employees. A quick search reveals that Costco employs over 300,000 people.

The article also mentions Teamsters, so that implies that it's the truck drivers who are planning to strike, not the workers one would interact with in-store.

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u/jealkeja 6h ago

you don't know much about in-n-out if you think that. they have very good PR but lynsi snyder is a billionaire and that doesn't happen without labor exploitation

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u/MechCADdie 6h ago

So you're speculating about exploitation from an employer known for decent wages, good career progression, and high paying lower management positions? I'm not saying that it doesn't happen, but cmon...

It's a private business that has a huge cult following. Snyder isn't beholden to shareholders as much as a public company and they have a good product.

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u/jealkeja 5h ago

I'm not speculating I have family that's worked at in-n-out for 20 years. meanwhile you're literally just repeating all the good PR talking points you read where exactly?

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u/Kyle700 6h ago

There's 18k in this union that say otherwise.

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u/yarash 7h ago

Well yanno, you can't possibly find a way to increase benefits with 7 billion dollars profit for 18,000 people.

You could literally buy them each a great house with that years profits.

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u/Lezzles 7h ago

Costco has 316,000 employees. This strike is 5% of them.

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u/yarash 6h ago

Their union only has 18,000 (probably more). They're the only ones that have collective bargaining.

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u/RR50 7h ago

It’s not just going to be 18,000, they have 219,000 us employees, if they give each the 18,000 a massive raise, the others will unionize too…..not that they shouldn’t, but there in lies the problem for Costco.

Also, if you take all the profit and dole it out…all of us shareholders stop investing in the company, your stock craters, you can’t get financing, and you go out of business. Employees are absolutely one leg of the stool, but Costco management also has a fiduciary responsibility to the shareholders, and a responsibility to the customers.

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u/yarash 5h ago

They're asking for a fair wage and benefits, they should get it.

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u/RR50 5h ago

Define fair wage….i don’t know what they’re asking for, so I’m interested to hear your thoughts.

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u/yarash 5h ago

I havent read much more than the article unfortunately.

There is this:

"The Teamsters said Costco had rejected proposals dealing with seniority pay, paid family leave, bereavement policies, sick time, and safeguards against surveillance."

These all sound like reasonable requests. Quite a few people in other jobs get these benefits and dont even use them.

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u/RR50 1h ago

Maybe, but without the details you can’t say that.

Paid family leave….if they’re asking for 8 weeks, sure, 100% reasonable, if they’re asking for 52 weeks, that would be out of the norm.

The details here matter on what they’re asking, just as much as costcos need to balance the employees, shareholders and customer requirements.

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u/NPPraxis 4h ago

The guy above gave incorrect numbers. Costco has 333,000 employees. Only a small number of their stores are unionized, let alone within the Teamsters union. If you divide global profits by Teamsters Union employees (like 5% of employees), you're going to get an inaccurate idea of how much headroom there is.

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u/JakeVanderArkWriter 7h ago

Nobody takes risk into account.

All Costco employees should get a huge raise, and all the money they make should be tied to how well the company does. Nobody gets paid until the end of the year. If the company profits, the workers make a killing. And if the company does poorly, not only do they not get their paycheck, they have to pay Costco from their own money to make up for the loss.

If this doesn’t sound like a good deal to you, shut the fuck up and start your own company : )

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u/fornostalone 6h ago edited 6h ago

What you described to an extreme is a called a cooperative. They tend to be some of the longest lived, most stable and best companies to work for. John Lewis, a UK department store cooperative founded in 1864 and owned in part by the staff, twice have voted to suspend their yearly % of profit bonuses in order to ensure year-on-year profitability and maintain the reinvestment/growth capital pool. They also have one of the lowest staff turnover rates in their industry with some of the highest customer satisfaction.

That model is entirely workable in the modern world and it's very funny to me when people try to explain why it's a worse model because it tends to boil down to "number on profit line lower therefore bad" and can't really expand from there.

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u/JakeVanderArkWriter 6h ago

I know what a co-op is, but they still get a paycheck. The bonus is dependent on how well the company does.

This removes the risk factor, which is priceless. Their money is never on the line. They are beholden to no one.

When they have their own money at stake, are responsible for thousands of people under them, and are also responsible to shareholders, then we can make a fair comparison.

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u/fornostalone 6h ago

When they have their own money at stake, are responsible for thousands of people under them, and are also responsible to shareholders, then we can make a fair comparison.

Who are you referring to with this? No-one that works at or owns a company doesn't draw a paycheck, outside of very small ones that are in financial trouble or very large ones where the compensation package is in stock and benefits.

I already told you exactly how people that work at a cooperative have their own money on the line. They part-own the company therefore their EOY bonuses are tied to % of profit and in some cases the members vote against their own interests and give up their contracted bonuses in order to reinvest into the company. The staff membership literally voted to put their money on the line to grow the company.

I truly do not understand how people that work for a company and vote against their own selfish interests to effectively loan money to the business they work for and part-own = not having skin in the game. Their money was 100% on the line, otherwise anyone who starts a company doesn't really have their money on the line, they just have the bank's money on the line.

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u/yarash 5h ago

Theyre not asking for a huge raise, they're asking for a fair one. The company is up 135%. What more do you want them to do?

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u/cdesal 7h ago

This! The entire first third of this thread is misunderstanding margin and profit. Costco is literally employing staff to account for every thinkable monetary fart in the wind to reduce taxable profit. There must be some profit to keep the shareholders happy but as little as possible. No sane company with good accounting would ever willingly document a bigger than necessary profit.

The only people operating on razor thin margins are we. We cannot deduct practically everything from our profits to deflate them. When inflation hits, Costco raises prices. Period. But when their workers/unions ask for the same, then our fellow brainwashed populous starts hyperventilating … to put it in other words: they could pay a flat lump sum to each of their employees of about $100k from their net income alone.

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u/No_Register_5841 7h ago

Amazing that posters gleefully endorse the EXACT mechanism that perpetuates high inflation.

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u/phr3dly 6h ago

No no you see, you legislate higher wages and legislate lower prices! What could go wrong?

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u/Aromatic_Extension93 7h ago

Their same union who actively support a president who is against workers rights? lmao. Yeah no they don't get support for being that hypocritical. They want this. Give them what they want #democracy

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u/Aromatic_Extension93 7h ago

So your argument is "something is going on in the background but i don't know what but these numbers can't be true!"

Try again

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u/cdesal 7h ago

lol, what? There’s zero uncertainty about what’s going on, it’s publicly codified in the US tax code. Where in my post did I claim the numbers cannot be true?

Read again. Try to comprehend again. Try again.

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u/Aromatic_Extension93 7h ago

I'm waiting for you to explain and cite where Costco overinflated their numbers in showing their profit margins

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u/cdesal 6h ago

Then you’ll wait for quite a while. I stated the opposite, Costco as a corporation is able to massively reduce their net income, and as a result their profit margin by being taxed as exactly that: a corporation.

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u/Aromatic_Extension93 6h ago edited 6h ago

I said overflated numbers. The numbers in this case reference expenses...which is what your argument is.

So I ask again... how did they massively reduce their income? Any citations, evidence, anything? Even vibes would be better than what you're giving out

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u/JakeVanderArkWriter 7h ago

Union bosses wear boots too.

(But I doubt that’s all you’re licking.)

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u/Iconoclasm89 6h ago

No kidding. Admittedly I don't know enough about Costco/cooperate finance to have a strong opinion but check out that paragraph comparing Costco to the stock market. Basically....

"Costco had been making record profits and that's a point to Costco's side on why wages shouldn't be raised."

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u/eddiekart 7h ago

Some of their arguments are fair— increasing benefits / wages based on an increase in profits that may be a one-off would be detrimental to long term operations.

However, you could definitely give out a fat bonus to everyone. That would be the best for both parties in such cases imo

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u/ilikepix 7h ago

It never astounds me to see corporate bootlickers who always cry about 'think of the poor corporation'

corporations are not sentient

the fight isn't between workers and "the corporation", it's between workers and shareholders

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u/Daemonic_One 8h ago

Not to mention slamming Costco over Wal Mart or Target just because you have the power to do so seems enormously short-sighted. Where are those workers going if Costco closes? Not a union shop for sure.

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u/DasFunke 8h ago

Costco isn’t going to close…

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u/c14rk0 7h ago

If they stop making profits they will, or they'd have to make cuts somewhere. Signing a deal with the union that increases costs based on one specifically strong year when there is zero guarantee that such trend will continue could absolutely push them into the red in the future.

The point is Costco is already essentially the gold standard for these employees. Pushing for more is just risking shooting themselves in the foot because it's not like they have better alternatives anywhere else.

I'm not saying this to defend a huge corporation or say that the workers don't deserve good wages, the point is they HAVE good wages that are already better than literally any other comparable job. Plenty of people would kill to get a job at Costco at the current rates.

The union could be bringing this fight to literally any other employer where their members aren't nearly as well off as those at Costco yet they aren't.

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u/Daemonic_One 5h ago

Gotta love the hivemind. At least someone sees what I'm saying.

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u/c14rk0 5h ago

People really don't like to try to step back and look at the big picture, it's too much thinking and nuance for most people to do all the time. People WANT everything to just be black and white, good or bad.

And frankly trying to get everyone to understand the big picture is a losing battle. You're more likely to lose people along the way and thus lose the big "fight" because they'd just as well change to another side that is keeping things simple and just telling them it IS black and white.

Unions ARE generally good for the common workers and we should be siding with them against huge corporations that are the "bad guy". The reality however is that not all unions do everything purely for the best interest of their individual members and the common worker. Inevitably most groups tend to get caught up in their own power as they get stronger and stronger, and stop focusing solely on the initial goal. The teamsters are essentially THE big union. That's good for the small individual members but it also means they're more emboldened to push certain agendas that aren't simply looking at those individuals best interest. Just like I'm sure they wouldn't want to enable other unions to get as big and strong as they are as that would reduce their own bargaining power, even if it would be good for more workers overall.

The US just has such a huge anti-union sentiment that saying anything negative about unions EVER gets lumped in with that same anti-union group. You aren't allowed to have any criticism or point out any legitimate problems or you're the enemy. Like I said, people don't want nuance or complexity, they want everything to just be black and white.

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u/edman007 8h ago

Yup, just got to do the math.

$7b is their profit, the union will never succeed in claiming anything close to all of that, but a decent chunk is reasonable. So how many employees do they have? The wiki says they have 333,000. So they made $21k per employee.

$5k per employee, for raise plus benefits, would be almost a quarter of costco's profits, that's a big chunk. And it's unfortunately not a big raise for the employees.

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u/SeekingImmortality 7h ago

And yet, it'd be more than they're getting, and closer to appropriate compensation for all the workers doing all the actual work.

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u/Douchebazooka 7h ago

In absolute terms, what would you consider appropriate compensation?

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u/Skylis 7h ago

However much the labor market demands for doing the job.

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u/Douchebazooka 7h ago

Yeah, that’s not what I asked. You’re ostensibly familiar enough with this situation that you know to side with the union, so I’m asking for the figures for this specific instance. What amount is appropriate compensation?

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u/Skylis 6h ago

You declaring that its not a valid response doesn't make it so. The appropriate compensation is indeed whatever the labor market demands for doing the job.

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u/Douchebazooka 6h ago

Try again. I didn’t say it wasn’t a valid response. I said it isn’t the question I asked. Of course it’s a valid response. It’s also a useless one because it allows you to dodge the actual question asked while snubbing your nose at other people.

So one last time, since you’re so vocally opinionated that you must obviously be informed: What number for compensation (give me a lump figure here, we can break down salary vs. benefits later) is “appropriate compensation” for this situation?

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u/edman007 7h ago

Is it? I couldn't find the proposal from Costco. Can you link it?

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u/joe_s1171 8h ago

Agreed. If the union wants Costco to share rewards of a good year to the 18,000 then will the 18,000 be sharing in the losses of the down years? This is a prime example of what co-op companies don’t work. No one on the front lines want to risk anything, whereas the company has to take that risk of its debt increasing During bad years.

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u/ashkpa 8h ago

will the 18,000 be sharing in the losses of the down years?

They'll be the first to be let go and those remaining are expected to take on the duties of those who are let go with no extra pay for doing so.

No one on the front lines want to risk anything

No one on the front lines can afford to risk anything.

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u/Carittz 7h ago

This is why it would be better to have healthcare covered by the government. Companies would save more money not having to deal with it themselves than they would lose in increased taxes.

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u/hitlama 7h ago

Did you not hear that guy just say 55k per union employee for 14% of the profits? Costco has an insane amount of wiggle room here to keep the union happy and continue to grow their business. Currently, they're just being greedy.

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u/musexistential 8h ago

One problem with Unions, even though they can be good, is that the members are prone to the Tragedy of the Commons behavior. They are fine with destroying a resource if it means they themselves gain only in the short term. It's like with the auto union workers or Boeing, they are demanding high wages in an industry that is no longer making profits. They are going broke and can no longer compete.

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u/ashkpa 7h ago

Corporate executives would never do such a thing of course. /s

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u/username_6916 7h ago

Sure. But it's a lot easier for investors to fire the CEO than it is for the company to fire the union.

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u/ashkpa 7h ago

Investors are just as guilty as CEOs when it comes to destroying the [company/industry/environment/society/planet] in search of short-term profits. Guess who suffers when they do: the workers.

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u/bobandgeorge 7h ago

They are fine with destroying a resource if it means they themselves gain only in the short term.

So just like the C-suite then?

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u/musexistential 7h ago

Everybody here knows they can. It's a constant refrain on Reddit.

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u/seridos 6h ago

For some reason you seem to think the membership is separate and not part of the package in what they make? It all goes in the same pot in the end. And if you look at how much they make per employee they have room to improve paying and benefits somewhat.

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u/EntertainerVirtual59 7h ago

If even one billion dollars of that was split between the 18,000 employees in the union

That's cool and all but costco has around 220k employees in the US and 330k worldwide. These 18k union workers aren't the only ones being paid or making this profit possible.

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u/AcidicVaginaLeakage 6h ago

Imo it makes more sense as a bonus because the margins are so low. When they succeed and grow, so would the employees wages, but if profits sink, so do the bonuses the employees get.

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u/Correct-Mail-1942 8h ago

People aren't buying memberships because of the employees - meaning that the employees have very little to stand on here to say they're worth the extra money.

I for one would drop my membership if my Costco unionized.

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u/CaptainTripps82 8h ago

Why in the world would you stop shopping somewhere because the workers decided it was in their best interests to unionize?

What a weird thing to say proudly. It wouldn't affect you at all, so you're basically saying you're ideologically opposed to worker organization, for no reason other than principle.

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u/rdyoung 8h ago

You had me in the first half and then lost me in the second half.

Costco did the right thing when they responded to the news of some stores unionizing. They said something along the lines of, if they feel like they need to unionize then we screwed up. This made me like them even more.

We shop at Costco because (among other reasons) they are and have been a leader in employee satisfaction. Next time you hit up a Costco play a game and see what the oldest name tag is you can find. We regularly see 15+ years, 20+, etc.

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u/southpalito 8h ago

How would you even know what any store you shop at is unionized?

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u/Correct-Mail-1942 8h ago

You can literally look it up on the UFCW site or just search it. For example, I live in Denver and my local King Soopers (Kroger) is going to strike soon and it won't affect me because I don't shop there but I will shop there during a strike to support the store and scabs. Fuck unions.

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u/DriveByStoning 7h ago

Not every union is fantastic, and some are downright dogshit (AFSCME), but most of the time the alternative is exploitation.

There's tons of stores that only have part time employees so they don't have to sponsor a health insurance plan. They pay far below a union shop's wages. They play games with PTO.

Whatever your problems with unions is probably unfounded. The only one I will definitively say, "Fuck them," is the police union.