NEW YORK (Real Money) -- It's a start. I am talking about the decision by Wal-Mart to take a hit to next year's earnings in order to give 500,000 workers a wage boost. The largest retailer in the world is going to give about a dollar an hour wage increase, 24% higher than the minimum wage even as the news of the cost sent the stock down hard. All I can say is hallelujah. This action, a big break with the past, shows that the new CEO Doug McMillon gets it. He's figured out that what Wal-Mart needs, more than anything else, is a work force that's inspired. To do so, he has to outbid other employers in the thousands of Wal-Mart neighborhoods to get and retain the best help. There's only one problem. He's still way below the quality retailers in hourly pay, especially Costco , which pays employees on average $21 an hour -- fully 65% higher than what you earn on average at Wal-Mart. More importantly, Costco's probably the single most generous retailer in the country when it comes to benefits. We know those benefits are worth far more in many cases than hourly wage when it comes to keeping the best employees. That's why you can walk into a Costco and see the same people for years. I see employees at Costco who know what I want and can anticipate what I am looking for. That's how long they've been there. And they love it. That's evident the moment you ask them about something in their area of expertise. You want to have a blast? Ask an associate in fresh meats how to cook that roast. Or what goes best with the crab legs. They've got ideas. They also know their way around the store. I went to a Wal-Mart in southern Louisiana last year and asked the greeter where I could find work pants. She sent me to washing machines. When I finally found my way to the pants section there was no waist smaller than 36. Tons of 44s! I had the great privilege to interview Jim Sinegal, the man who turned Costco into the global powerhouse that it is, about why Costco can pay more than everyone else and still be successful. He came back with an answer that I will never forget: They are successful, both for the customers and the shareholders, precisely because they pay more than everyone else. By keeping the associates happy, Costco has the lowest turnover of any major retailer. That means, Jim said, that they also have the lowest training costs, and that's the real secret of Costco's success. Training's a dead weight loss, he said. It detracts from the managers' time. It's unsatisfying to the customers, who don't want to have hapless help. Jim said that at some retailers 30% of the profit goes to training. His stores have almost nil training costs. Jim's not the only one who realizes this. Howard Schultz of Starbucks is offering tuition payments for seasoned employees he wants to keep -- something that's so necessary to maintain that fabulous customer experience. I don't want the people who know how to make "The Cramer," a triple venti cappuccino with skim wet, going to work at Dunkin' Donuts . Chipotle promotes from within at a pace that's so exciting to hardworking people that they would run through brick walls for the joint. But McDonald's ? How do you say revolving door? That's okay when the menu's simple but McDonald's has anything but a simple menu. Wal-Mart took a great first step. It is fabulous to recognize how important it is to have a happy and sustainable work force, even at a cost to the shareholders. Now, if you just make that shopping experience a little more special, your stock might be the one to buy. Editor's Note: This article was originally published on Real Money at 1:28 p.m. EST on Feb. 19.
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