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Costco is famously adored by its fans, and its leadership wants the discount big-box chain to remain beloved. Costco co-founder and former CEO James Sinegal so fervently believes in keeping customers happy that hes driven to profanity to express the strength of his feelings. You cant say People are our most important product, and hang signs all over the place that say People are our most important product, and then treat them like shit. Your customers or your suppliers are going to see that you dont really mean it, he recently told an interviewer. Which is why a recent policy change by the retailer is so fascinating. Starting this month, Costco began enforcing a new benefit for executive tier members, who pay $130 annually rather than the $65 for Gold or Businesses membership. Those who pay extra now get an extra hour to shop in relative peace in the morning (except for Saturdays, when they only get an extra half hour), separate from the hoi polloi at the chains often crowded stores. It might sound like a small change, but it illustrates not only a key choice business leaders committed to customer happiness, like Sinegal, have to make but also something fascinating about the direction the U.S. economy seems to be heading as a whole. The plus sides of tiered pricing From a straight revenue maximization perspective, the new rules make sense. Executive tier members make up 47 percent of Costco shoppers but drive 73 percent of its revenue. Add to that fierce competition from the likes of Sams Club and BJs, and locking in more customers with a premium membership is a clear economic win. Costcos early-access benefit for Executive Members represents more than a customer perkits a smart application of behavioral economics. By leveraging exclusivity and loss aversion, Costco creates perceived value that can justify the $65 premium between membership tiers, explains Fortune. Industry analysts suggest the move could accelerate Executive Membership conversions. And obviously, the new perks delight many premium members. It is such a relaxing shopping environment and not survival of the fittest, enthused one Reddit user. I could make a return without waiting in the giant line and then went and spent $200 elsewhere. Win, win! wrote another. Not everyone is happy with Costcos new policy But for every pleased premium member, there is another shopper unwilling and unable to pay double to shop at Costco. They are not so pleased. I immediately canceled my membership for a 100 percent refund. The company breached the terms in which I took out the membership. I burned up a gallon of gas to get there at what was the normal time, had trouble walking and no consideration. I was told to wait 1/2 hour. Ill stick with BJs and continue to be treated with respect, grumbled one on Facebook. Some Costco workers also complained about the move to open earlier to cater to premium members. We struggle to get open [at] 9:45. I can imagine its going to be fun every morning in merchandising, reads one representative Reddit comment. As Sinegal himself observed, people notice when you dont treat them with respect. For some employees and customers, a move to tiered membership clearly treats some people with more respect than others. Goodbye middle class, hello premium pricing Only time will tell whether Costco loses more customers like the irate Facebook poster above than it gains from new premium memberships. But other business leaders considering offering premium services that make the experience of their product relatively worse for other customers should be mindful of these tradeoffs. Its a decision that more and more leaders seem to be weighing. As management consultant Daniel Currell noted in a fascinating essay in The New York Times on the rise of pricey upgrades at Disney theme parks, companies are increasingly looking for ways to cater toand extract more profit fromtheir most upmarket customers. More and better data and AI assistance enable companies to target and reach these customers. But the real driving force behind the rising popularity of premium pricing is a fundamental shift in the American economy. That middle class has so eroded in size and in purchasing powerand the wealth of our top earners has so explodedthat Americas most important market today is its affluent, he writes. What Costcos new policy says about the economy Currell observes that while a lot of core economic data, like unemployment and household income levels, have looked good on paper over the last few years, consumers have reported feeling incredibly negative. Its a puzzle, he says, that may be partially explained by tiered pricing like Costcos new policy. People notice when you treat them like shit. And watching others with more resources literally skip to the front of the queue certainly makes many people feel like shit. It might be good short-term business strategy to say the hell with it, let them stew, and pocket the proceeds. The question of what this bitter dynamic will do to a businessand a nationlonger term remains to be seen. Jessica Stillman This article originally appeared on Fast Companys sister publication, Inc. Inc. is the voice of the American entrepreneur. We inspire, inform, and document the most fascinating people in business: the risk-takers, the innovators, and the ultra-driven go-getters that represent the most dynamic force in the American economy.
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Over the years, I have conditioned myself to only be able to focus in 25-minute increments, a timer counting down in my peripheral. The five-minute break following? Its like a reward. It is now accepted wisdom that taking regular breaks during the workday makes one more productive. How long those breaks should be, however, depends on which productivity method you are subscribed to. Recently, a University of Cambridge mental health researcher has suggested that longer breaks could, in fact, be more effective at tackling those afternoon slumps. “The most productive people work for about 52 minutes at a time and then take 17-minute breaks,” Olivia Remes shared on Instagram. The “52/17 rule” has been around for a while, promising to increase productivity and work-life balance, but Cambridges social post has renewed discussion about it. “This is much better than working for long stretches, adds Remes, who has a PhD degree in public health and primary care from Cambridge. The brain is a muscle that, like every other, can be overstretched. Incessantly being bombarded with emails and Slack messages, juggling calendars and jumping at the Microsoft Teams ringtone, hopping on and off and back on Zoom, and fielding work texts . . . all can cause information and cognitive overload. As many dont have the option to work less, a number of productivity hacks have emerged insteadfrom the MTR framework and time blocking to my beloved Pomodoro method. But, even armed with all these hacks and tools, or leaning on AI to take off some of the mental load, it can still feel like an uphill battle to focus even for a few hours a day. Thats why its not only important when we take these breaks, but how we take them. Remes says the researchers found that while practicing the 52/17 method, the most productive people, during their breaks, completely disconnected from technology.” No sneaking in a few emails or scrolling on X or TikTok. “Instead, they completely disconnected and gave themselves a chance to relax and to rest,” she adds. So its not just the 17 minutesits how you use them. (Or dont use them.) Of course, unplugging is easier said than done. Particularly in a work environment that may not offer the flexibility to pause outside of designated break times, or might question why you’re doing a crossword puzzle during the middle of the workday. Even if you cant set a timer for the entire 17 minutes, stepping away from your desk each hour to get coffee, do a lap around the office, or simply stare out the window and think about what youll have for dinner might just make a difference.
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Below, coauthors Bruce Schneier and Nathan Sanders share five key insights from their new book, Rewiring Democracy: How AI Will Transform Our Politics, Government, and Citizenship. Bruce is a security technologist, teaching at the Harvard Kennedy School and the Munk School at the University of Toronto. He is also a board member of the Electronic Frontier Foundation and Chief of Security Architecture at Inrupt, Inc. Nathan is a data scientist affiliated with Harvards Berkman Klein Center. He is focused on making policymaking more participatory, with his research spanning machine learning, astrophysics, public health, environmental justice, and more. Whats the big idea? AI can be used both for and against the public interest within democracies. It is already being used in the governing of nations around the world, and there is no escaping its continued use in the future by leaders, policy makers, and legal enforcers. How we wire AI into democracy today will determine if it becomes a tool of oppression or empowerment. Listen to the audio version of this Book Biteread by Bruce and Nathanbelow, or in the Next Big Idea App. 1. AIs global democratic impact is already profound Its been just a few years since ChatGPT stormed into view and AIs influence has already permeated every democratic process in governments around the world: In 2022, an artist collective in Denmark founded the worlds first political party committed to an AI-generated policy platform. Also in 2022, South Korean politicians running for the presidency were the first to use AI avatars to communicate with voters en masse. In 2023, a Brazilian municipal legislator passed the first enacted law written by AI. In 2024, a U.S. federal court judge started using AI to interpret the plain meaning of words in U.S. law. Also in 2024, the Biden administration disclosed more than two thousand discrete use cases for AI across the agencies of the U.S. federal government. The examples illustrate the diverse uses of AI across citizenship, politics, legislation, the judiciary, and executive administration. Not all of these uses will create lasting change. Some of these will be one-offs. Some are inherently small in scale. Some were publicity stunts. But each use case speaks to a shifting balance of supply and demand that AI will increasingly mediate. Legislators need assistance drafting bills and have limited staff resources, especially at the local and state level. Historically, they have looked to lobbyists and interest groups for help. Increasingly, its just as easy for them to use an AI tool. 2. The first places AI will be used are where there is the least public oversight Many of the use cases for AI in governance and politics have vocal objectors. Some make us uncomfortable, especially in the hands of authoritarians or ideological extremists. In some cases, politics will be a regulating force to prevent dangerous uses of AI. Massachusetts has banned the use of AI face recognition in law enforcement because of real concerns voiced by the public about their tendency to encode systems of racial bias. Some of the uses we think might be most impactful are unlikely to be adopted fast because of legitimate concern about their potential to make mistakes, introduce bias, or subvert human agency. AIs could be assistive tools for citizens, acting as their voting proxies to help us weigh in on larger numbers of more complex ballot initiatives, but we know that many will object to anything that verges on AIs being given a vote. Its likely that even the thousands of disclosed AI uses in government are only the tip of the iceberg. But AI will continue to be rapidly adopted in some aspects of democracy, regardless of how the public feels. People within democracies, even those in government jobs, often have great independence. They dont have to ask anyone if its ok to use AI, and they will use it if they see that it benefits them. The Brazilian city councilor who used AI to draft a bill did not ask for anyones permission. The U.S. federal judge who used AI to help him interpret law did not have to check with anyone first. And the Trump administration seems to be using AI for everything from drafting tariff policies to writing public health reportswith some obvious drawbacks. Its likely that even the thousands of disclosed AI uses in government are only the tip of the iceberg. These are just the applications that governments have seen fit to share; the ones they think are the best vetted, most likely to persist, or maybe the least controversial to disclose. 3. Elites and authoritarians will use AI to concentrate power Many Westerners point to China as a cautionary tale of how AI could empower autocracy, but the reality is that AI provides structural advantages to entrenched power in democratic governments, too. The nature of automation is that it gives those at the top of a power structure more control over the actions taken at its lower levels. Its famously hard for newly elected leaders to exert their will over the many layers of human bureaucracies. The civil service is large, unwieldy, and messy. But its trivial for an executive to change the parameters and instructions of an AI model being used to automate the systems of government. The dynamic of AI effectuating the concentration of power extends beyond government agencies Over the past five years, Ohio has undertaken a project to do a wholesale revision of its administrative code using AI. The leaders of that project framed it in terms of efficiency and good governance: deleting millions of words of outdated, unnecessary, or redundant language. The same technology could be applied to advance more ideological ends, like purging all statutory language that places burdens on business, neglects to hold businesses accountable, protects some class of people, or fails to protect others. Whether you like or despise automating the enactment of those policies will depend on whether you stand with or are opposed to those in power, and thats the point. AI gives any faction with power the potential to exert more control over the levers of government. 4. Organizers will find ways to use AI to distribute power instead We dont have to resign ourselves to a world where AI makes the rich richer and the elite more powerful. This is a technology that can also be wielded by outsiders to help level the playing field. In politics, AI gives upstart and local candidates access to skills and the ability to do work on a scale thatused to only be available to well-funded campaigns. In the 2024 cycle, Congressional candidates running against incumbents like Glenn Cook in Georgia and Shamaine Daniels in Pennsylvania used AI to help themselves be everywhere all at once. They used AI to make personalized robocalls to voters, write frequent blog posts, and even generate podcasts in the candidates voice. In Japan, a candidate for Governor of Tokyo used an AI avatar to respond to more than eight thousand online questions from voters. We dont have to resign ourselves to a world where AI makes the rich richer and the elite more powerful. Outside of public politics, labor organizers are also leveraging AI to build power. The Workers Lab is a U.S. nonprofit developing assistive technologies for labor unions, like AI-enabled apps that help service workers report workplace safety violations. The 2023 Writers Guild of America strike serves as a blueprint for organizers. They won concessions from Hollywood studios that protect their members against being displaced by AI while also winning them guarantees for being able to use AI as assistive tools to their own benefit. 5. The ultimate democratic impact of AI depends on us If you are excited about AI and see the potential for it to make life, and maybe even democracy, better around the world, recognize that there are a lot of people who dont feel the same way. If you are disturbed about the ways you see AI being used and worried about the future that leads to, recognize that the trajectory were on now is not the only one available. The technology of AI itself does not pose an inherent threat to citizens, workers, and the public interest. Like other democratic technologiesvoting processes, legislative districts, judicial reviewits impacts will depend on how its developed, who controls it, and how its used. Constituents of democracies should do four things: Reform the technology ecosystem to be more trustworthy, so that AI is developed with more transparency, more guardrails around exploitative use of data, and public oversight. Resist inappropriate uses of AI in government and politics, like facial recognition technologies that automate surveillance and encode inequity. Responsibly use AI in government where it can help improve outcomes, like making government more accessible to people through translation and speeding up administrative decision processes. Renovate the systems of government vulnerable to the disruptive potential of AIs superhuman capabilities, like political advertising rules that never anticipated deepfakes. These four Rs are how we can rewire our democracy in a way that applies AI to truly benefit the public interest. Enjoy our full library of Book Bitesread by the authors!in the Next Big Idea App. This article originally appeared in Next Big Idea Club magazine and is reprinted with permission.
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