The Costco Model in a Burger Chain

 

The Burger Chain That Pays $10 An Hour With Benefits |
[Via  ThinkProgress]

Shake Shack, a burger chain with locations in Florida, New Jersey, New York, Pennsylvania, Washington, D.C. as well as international locations in the Middle East, Russia, Turkey, and the United Kingdom, pays starting workers $9.50 an hour outside of New York City and $10 an hour for New Yorkers, CEO Randy Garutti told ThinkProgress. It also offers full-time employees health, dental, vision, retirement, and disability benefits plus paid time off.

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{I’ve been a Costco member for over 20 years.)

The Costco model is to pay better than prevailing wages and good benefits but to make up for it in much lower training costs due to turnover. They hire from within (it does not hire MBAs to fill positions) and provide people a long term position treated with respect rather than a race to the bottom, like the WalMart model.

The result is sales per employee that are almost 3 times higher than WalMart’s.

The WalMart model may get to big profits faster but, as we are seeing, is not a sustainable model.

This is not the only fast food place using this model. In-N-Out burger does also. I

Perhaps we are beginning to move away from the sociopathic, authoritarian model of the last 30 years to a more community-based, supportive one. 

Because, as has been shown, it is possible to make money with each.