US Bank Term Professor of Management Wayne Cascio continues to garner attention for his work regarding corporate competitiveness, as well as long-term financial and economic impacts of employment policies. Those elements are the basis of his recently published article in the Academy of Management Perspectives – Decency Means More than “Always Low Prices”: A comparison of Costs to Wal-Mart Sam’s Club. Cascio shared highlights of his findings on Oct. 30 as the featured speaker during the Business School’s Rutt Bridges Business Seminar – an endowed series of lectures funded by the Rutt Bridges Family Foundation.

Cascio says his interest in these warehouse businesses was fueled after reading Wal-Mart Founder Sam Walton’s biography and Charles Fishman’s The Wal-Mart Effect, a book about the retail giant’s impact on the American economy. “The feeling about this enterprise is never neutral,” says Cascio. “People either love low prices or hate what is done to provide them.”

During Cascio’s presentation, he focused on the practices and results that separate the warehouse operations of Sam’s Club and Costco. “It doesn’t have to be a race to the bottom,” Cascio says. “You don’t have to run roughshod over your workers to successfully pursue a low-cost strategy. You can compete using smarter, more productive workers.” Costco has an attractive benefits package and pays its employees 40 percent more than Sam’s Club, whose turnover rate is 2½ times higher. Cascio argues that Costco saves money over the long run by reducing costs associated with constantly replacing employees.

Cascio also acknowledged that investors and Wall Street tend to be more wary of the impact to shareholders resulting from Costco’s more generous employee benefits policies. On the other hand, Cascio shows how the hidden costs of lower pay and benefits for Sam’s Clubs employees actually end up costing taxpayers more through subsidized services including health care.