certain retailers -- Costco and Whole Foods to name two that come to mind -- have discovered that paying people "above market" gets you better qualified, more productive workers (so you need fewer of them) and dramatically lowers turnover (which again has a big positive impact on productivity).

I don't think it's the threat of unionization so much as the caliber of the employees they hire (which is much better than the typical unskilled retail worker). If costco or whole foods didn't pay their employees above market, those workers could find another employer that would.

It's the way it should work