Here’s an analysis of the different business models used by WalMart vs Costco.
You pretty much have to read the whole thing, but it seems mostly to boil down to the vastly larger selection of goods offered buy WalMart, that Cosco is essentially a grocery store with a side business of Dept Store goods whereas Walmart is the opposite, Costco caters to more affluent, opportunity shoppers whereas WalMart caters to regular, less affluent shoppers.
Paying someone more doesn’t make them more productive. Higher wages can allow an employer to hire workers who’re more productive, but that wouldn’t help Walmart’s current unskilled employees. Increased productivity from unskilled workers generally means fewer of them are needed.
Walmart certainly has the option to change its business model. But our economy has a large demand for no-service, low-price stores and if Walmart exits that segment, others will fill its place. Has anyone compared the various “dollar” stores’ business practices to Walmarts? They seem to be encroaching on the same niche.
Your argument supports increasing the social safety net, not complaining about Walmart.
Walmart offers wages at a level that gives them as many employees as they want. Offering higher wages would give them a bigger selection and better quality, but they don’t need that with their current business model.
That the current economy has surplus unskilled workers is not Walmart’s problem. That surplus is a systemic problem that is best addressed by the government.
They have completely different cost models, as noted in your article. Costco is able to pay higher wages because they have lower staffing requirements (since they are a warehouse based model) and since they can charge membership fees and thus have more stable income flows (as long as membership stays high). They also have a more limited inventory which simplifies their own logistics.
All of this is good, and certainly Costco is doing well. Perhaps they have hit on the new model that eventually everyone will go to, as Walmart did in the past on their own rise to dominance of their market. Companies rise and fall after all. But Costco employs around 170k employees in total, while Walmart employes well over 2 million. So, looked at that way, while Walmarts average salary is $12.67 and Costcos is $20.89 (from your article), I’d say that Walmart is more beneficial to more workers than Costco is. In order for Costco to get into Walmarts league they would need to increase their employees by an order of magnitude (and then some) as well as their operating expenses and overall revenue.
My argument is against the assertion that people can just “go somewhere else” and thus it’s a free market paradise. It takes a lot of work removing the free market from consideration, thus it’s not a free market.
You’ll notice I also don’t agree that “not working” is an option.
Don’t shop at Wallyworld, don’t buy Apple products, buy merch that was made in your country of origin, try and patronize that little privately owned book shop on the corner every once in a while, organize a write-in campaign, get your nephew/niece/son/daughter to organize his crappy work place, hold your congressperson accountable…
Man it wasn’t THAT long ago that a strong back & work ethic would get you a shot at the dream: home ownership, sending your kids to college, security in your old age…just seems that common sense, decency, and an eye on the long-view of what’s important was shipped overseas along w/a whole helluva lotta jobs & opportunity for advancement (in other words: hope).
I could go on about an economy that will be largely service-based, about how an exhasted and beaten down workforce just doesn’t have the energy (let alone know-how) to fight back, about unbridled & unchecked greed among the wealthy and how we may just end up with working conditions for unskilled labor that resembles pre WWII horrors…but what’s the point? They gonna do what they gonna do-the big shots know what’s comin’ and that if they’re gonna have any chance of staying in the game they kinda need to adopt an attitude of “Hey, I got mine-go get yours”. There really is nothing, at this point, that can be done about it-& all my above suggestions are busy work to keep ya conscious clean lol.
If you REALLY wanna do somethin constructive plant sime anarchist literature around the grittier neighborhoods nearest your community.
Sam’s Club employs around 110,000.
Yes, exactly. The problem is not Walmart, it’s current market conditions.
[QUOTE=Farin]
Not working, sadly, isn’t a choice in our society. Homelessness isn’t something you can live with. Pun intended.
[/QUOTE]
Now working does not equate to automatic homelessness. And even if it did, it’s still a CHOICE. And, of course, if we don’t exclude the middle, it’s only one of several choices. I’m not arguing that folks with no skills have limited choices. Of COURSE they do. But you are denying that they have any choice at all, which is simply incorrect.
If we are only talking about a few people then I don’t see what the problem is to be honest. Again, even if we are talking about ALL laborers we are talking about a pretty small percentage of folks who actually make the minimum wage. That includes kids working their first job who make up the bulk of those making the minimum wage from what I recall.
I’m sorry, but I’m going to need to see some cites to back all of this up as it’s not intuitive to me that this would or is happening. Again, my understanding is that we are talking about less than 5 percent of the total employed are making the minimum wage, and I haven’t seen anything indicating that semi-skilled workers are distorting the labor market by pushing this figure up, which is what you seem to be asserting here.
They do more than ‘just’ keeping food in your stomach. You seem to be conflating unemployment benefits with other assistance programs, and that’s simply not the case.
Finding another job is ALWAYS feasible, though it might be difficult and might not be worth doing. All of this has little to do with Walmart, however, and doesn’t seem to really address the assertion that Walmart is paying workers less than their labor is worth or that workers have no choices…well, at least it doesn’t back up the assertion that workers have no choices, merely re-asserts it in a different way.
Again, you assert this but I’ve seen no proof of it as yet. I think it’s going to depend on the area you live in and a host of other facts as to whether or not low paying no skilled jobs are available at many places or only a few…or, only at Walmart if the assertion about that is correct. Anecdotally I can tell you that in my area there are plenty of low paid, low skilled jobs. Certainly my son (17) doesn’t seem to have any problem switching from Albertson’s to Walmart to (currently) Best Buy. Perhaps in Cleveland it’s different…which, getting back to the OP, seems to be a good reason for Walmart to allow employees to donate food to less fortunate employees for Thanksgiving.
It’s always hard at the bottom rung. My family immigrated from Mexico to the US the old fashioned way so no need to tell me what it’s like. 
Fortunately, not everyone STAYS at the bottom minimum wage rung indefinitely.
Sorry, have to run so no time to continue atm. I’ll try and hit the rest later if someone else doesn’t do it.
Originally Posted by Icerigger
I would like to see the Catholic Church make a big stink about this, start denying the sacraments to Walmart executives who are Catholic. It is against Catholic doctrine for profitable companies not to pay their employees a living wage.
Indeed.
RERUM NOVARUM
http://www.vatican.va/holy_father/le...ovarum_en.html
OK, now tell us where they define what is the support needed by a “frugal and well behaved wage earner”.
But more importantly, show us where not doing so is an excommunicatable offense. You see, not everything the Church implores us to do falls in that category.
Or, you might remember the first rule of holes and the fact that you’re in one.
The problem is that Walmart supporters will point to the frugal part.
Heat, electricity, food, medicine, roof. All wasteful and a sign of degraded morals.
You laugh, but here’s the thing: If you want to go around impose Canon Law, then you also have to live with the consequences of imposing it across the board. That means, Church on Sundays, no divorce, no abortion, no sex before marriage, etc.
Frankly, it was a very stupid thing to propose in the first place, but if the person proposing it does not want to deal with the full implications, then he can simply withdraw the proposal.
The implied subsidy for employers is one argument in favor of the minimum wage according to some economists. Depending on the elasticities in the labor market, the subsidy of the EITC might fall predominantly on employers, and the minimum wage would sort of respond by transferring some of that subsidy back to workers if the values work out right. Legal incidence and economic incidence aren’t the same.
I think it is interesting that Walmart is being accused in this thread of both paying their employees much less than they are worth, while at the same time being the only place that will employ them.
But Sam’s Club, as I understand it, has exactly the same model as Costco - and Costco is still kicking their butt. I’m well aware of the differences in business models, but as I said this the first bit of data I’ve seen where WalMart and Sam’s Club are broken out. I’d love to compare Sam’s Club more directly, but I wouldn’t think that their numbers would be that much different.
Also WalMart has a massive advantage in producer leverage (though Costco pushes their producers also.) You might have noticed that the Kirkland brand gets lots of raves here - I don’t know if there is a WalMart brand, but I’ve never heard anyone say anything good about it.
WalMart’s inability to keep their shelves stocked was not due to the forces of nature, it was due to mismanagement.
With a 37% turnover rate, they could fix that problem real fast. It is common these days to pay new employees less - they could pay new, better, employees more, and give raises to current employees they want to keep. The others would get the message. Problem solved.
As for fewer employees needed - that is a feature, not a bug. The ones there will have more money to spend which will increase consumption which will increase the need for other workers. Or WalMart can open more stores with increased sales and hire the good ones.
When there were articles on the dollar stores as they prospered during the recession I don’t remember reading anything about labor issues, but I don’t know.
Now why do you think Costco attracts affluent shoppers? It ain’t the great decor. More than 50% of my Costco is non-grocery items. I don’t that I save enough money to make my membership worth it on that account (having no kids at home) but we think it is worth it because of high quality stuff and a reasonable experience. The bread in particular is the best around. Any aggravation I get there is from the other shoppers, not from Costco employees.
I agree that they are not exactly the same, but if we could break out the Sam’s Club numbers we’d have a better idea. Costco wins the only comparison I found.
Sam’s Club Operating income 2012 1.9 billion. Source
Costco operating income 2012 3.0 billion Source
Like I said, my issue wasn’t with WalMart or the government assistance. It’s assuming that market conditions are ripe for market forces to kick in for labor. It’s still very much an employer’s market. They can deform the market forces in any way they wish. WalMart does do this, but asking them to subvert profit will never fly in the way our public company requirements are setup.
Yes, people ARE doing this sort of thing and it’s why the unemployment rate is so low. People have their reasons. But there’s a lot of difference between someone who has the emotional/family/financial support to drop the quest for work and the people who are working because they need to survive. I don’t count those people because there is always a constant stream of people dropping out of the workforce for multiple reasons, even during good years.
I am saying that the choice of “not working” is a non-starter to most people that work. It equates homelessness in the vast majority of these cases. Just because you can crash on a friend’s/relative’s couch doesn’t mean you aren’t homeless and you still don’t have two pennies to rub together. And “Crashing on a couch” is a lot harder if you have any sort of family.
Yes, but kids making minimum wage aren’t the bulk of the minimum wage workforce right now. Go to a WalMart, Safeway, Kroger…whatever is in your neighborhood and look at the workers. Most will be mid 20’s. You will have a few younger and a few older (not to be confused with “elder”). The Older ones are more likely to be the ones that are depressed out of their market. Things like construction and other fun semi-skilled workers are represented here. A lot of them will move back into their old professions once they start building more houses than people and such. This will allow the traditional model of less-than-livable wages being paid to kids and the elderly to return.
There is a division here that I’m guilty of not defining and I apologize. Minimum wage is roughly 4.7% of workers. 40% of workers make less than $33,000 a year. That’s roughly a livable wage in a lot of places, especially if you are roommates/coupled with someone who makes the same. Contrast that to someone making $7.25 an hour, or $15,000 a year and there’s a big difference. Anything under that 30/33k a year mark is very hard to live on as a single person. Some stories you hear about spouses being unable to split are due to this sort of thing (other versions of these stories are because some people are idiots with their money).
WalMart doesn’t pay all of it’s workers Federal Minimum wage for more reasons than just employment length. A lot of it has to do with state minimum wages. What I’m talking about here is everything under that “livable” wage. That’s the zone that you want benefits to offset your costs and that’s the area where you are lucky to have a job because they randomly pulled you from the 250 applications they were reviewing.
Like I said, though, this is how the benefits programs were setup in the 90s. You get “help” and not “all your bills paid” so that if you are making $7.25 an hour and are trying to support a family, you can get food or some rent assistance or something. This is how it’s supposed to work.
I’m sorry, but I believe you are. These benefits are not including unemployment, these are the average (and in my states case maximum) payouts for food, rent, and electrical assistance.
It is not always feasible to find another job. Go application dropping to retail places (er…don’t actually quit your day job for WalMart or Kroger 
) and see how long it takes to get a call back. If, as you assert below, you’re in a smaller population density place, you may get a call back within the first 5 or so (admittedly, you’d be at a disadvantage if you are a professional of some sort. Most retail joints actively filter those out so that you don’t get trained and then leave in 3 months to a real job.)
The larger the population center the less likely you are going to be so lucky.
I cited evidence in that very post. 250 applications on average for every job opening. For WalMart in particular, there were 5 million applications nationwide for a rolling set of 15,000 jobs nationwide. If you calculate that with the average 3 week rolling hiring set or 260,000 jobs in a year, that’s 20 per application. But with a 30%+ turn over, I’m betting they don’t do a time-frame and simply call in a recent-application short list that they constantly compile.
As for areas, it certainly does depend on the area. The less population in your area, the better off you are. The more population in your area, the worse. There are outlier areas on both sides of this.
To get back to the OP, I don’t mind if WalMart collects for it’s employees. I only mind if they force them to donate, in some way. (When the story becomes “give a can of yams or lose your job” then I’ll be all sorts of internet outraged.)
I also grew up incredibly poor. I am where I am through a lot of hard work and luck. I remind myself that the working sector, today, is very different than what I had to go through. Even before the crash, things were starting to suck worse than par for the bottom.
Their brand is “Great Value”. It’s…a brand! I’ve never really bought that brand when i manage to shop there so I can’t rate it for you. (But the boxes look like the “CEREAL” black and white generic boxes on old sitcoms.)
Sam’s Club total revenue 53.8 billion same source.
Costco total revenue 105 billion same source