We will here define “free markets” and examine the role of competition in a free market to answer the question “If businesses are greedy, why doesn’t milk cost $20?”
It’s introductory material, so yes, I do not cover every single aspect of it, but I give a basic viewpoint that people never consider.
Milk doesn’t cost $20 yet. But wait a few more years.
I don’t think that was the point of the article 
How would you know?
I know the guy who wrote it.
Markets aren’t perfectly competitive.
haha, brilliant marketing. Use modern populism to grow your base. Costco’s not even in the same market as WalMart.
Let’s throw random facts and hope they stick! Hurr durr!
What’s a “record profit”?
http://www.huffingtonpost.com/2013/03/12/costco-profit_n_2859250.html
I love the misleading title: “Costco’s Profit Soars To $537 Million Just Days After CEO Endorses Minimum Wage Increase”. Is it just me, or does it imply there is a causal relationship?
Record profit in this case means highest profit for that company. They weren’t saying Costco had higher net profits than WalMart.
I’m pretty sure the Costco CEO believe in what he’s saying, but it’s still awfully convenient that his recommended minimum wage increase is above the starting wage of his competitors and below the starting wage of his own company.
Costco’s a great company and Sinegal’s a great CEO. They have a good business model and he runs a tight ship. It’s a very labor un-intensive model with fewer, bigger stores, carrying fewer, bigger items almost exclusively in the grocery market with less manual labor put into presentation than other stores. They pay their fewer workers relatively well - whether that benefits them in the long run is hard to say, but it’s certainly not making them go bankrupt. It does limit their agility, because there’s very little room to move on their prices if they ever needed to cut something it would almost certainly be some employee benefit or salaries. But in the mean time why not pay more and get the better employees?
Competitors with different business models (WalMart, Target, etc.) can’t pay what Costco pays or they’d go broke. If they did pay that compensation they’d have to take up the Costco business model, which wouldn’t work. WalMart, Target, and other department stores offer hundreds of thousands of products compared to Costco’s few thousand.
I can’t help but note that the same people praising Sinegal for paying more cry about wages in a market being a “race to the bottom” and all that.
@Wheylous: Could you write a piece on minimum wage laws for that website?
Greendogo - if demand is high, then I will do so in the future. However, there are plenty of articles out there that critique the minimum wage thoroughly.
Actually, you know what? I will make a new section on LibertyHQ to contain anti-minimum wage articles. Look around for it in the next week. I’ll post the link here.
How can an article on a cattalactic problem mention neither supply nor demand?
Ah, so by competing and offering higher wages for the same work, employers determine marginal revenue product. The only difficulty is - will I take the risk? How will I know whether people are being under-payed?
Good point, cporter. I’m sure it also has to do with getting people to shop at his store.
(NOTE TO MODS: photo meant to portray greed, not any particular ethnic group.)
Are you asking questions in order to learn, or are you just here to troll?
Meistro - this is an article that is meant to introduce the issue to very beginners who have never even thought about markets.
Even though I write in a not-completely-serious format, to learn.
In a repeated-game scenario it’s probably not the best idea to post a picture of a niggardly jew after posting what’s supposed to be a question.
