A good question. Perhaps some companies, like CostCo, feel that properly compensated employees provide better customer service and a better experience? Perhaps some feel it is wrong for the taxpayers to subsidize their people? I know CostCo gets beat up on Wall Street for this, but I’ go there over WalMart. Ditto Target. So this strategy works on me, at least.
But they don’t, unless you think having to pay a $40 membership fee just to be allowed to enter the store, being ignored once inside, having to wait in line to exit, and not being offered any bags for your purchases constitutes “better customer service”. What people will go through to save a couple of bucks…
Will you people stop comparing Costco to Wal Mart? They’re not even in the same retail category. If y’all were honest, you’d break out the Sam’s Club numbers out of Wal-Marts 10-k and compare Costco to those. But that would take research and effort, so it is never done.
So let me prove it to you. A simple analysis of sales per employee would make this obvious:
Costco: $51 billion sales/118,000 employees = $432,000 sales per employee
WalMart: $285 billion sales/1,800,000 employees = $158,333 per employee
It’s a different category. It’s different market. You people are comparing apples to oranges.
So, please, for the love of God and honesty, Stop it!.
…
However, y’all will be glad to know that earlier I did some financial comparisons, showing why calls for “Wal Mart just needs to pay its people the same as Costco” are simplistic, made without a single thought as to business models, cash flow analysis, or any of the thousands of variables one needs to juggle to maintain a business. So, without further ado, is a post I wrote just the other week about this very same topic:
I also went on the theme a little earlier, I see:
To answer the question: Good.
Just as good as Sears, A&P, Montgomery Ward, or any other retailer who looked to dominate the American market with top-notch technology, an ability to ram costs and prices down to the bone, and finally imploded in a morass of bad decisions and unforseen externalities. As will happen to WMT - hell, their margins have been slowly eroding since 1992. Their absolute size might seem impressive (8% of the total US retail market), but internally they’re not doing as well as their detractors might believe.
Ours is damn crowded, and lots of people love it. We don’t do our major shopping there, but it is great for things like printer cartridges. I’m not that crazy about the place (my kid loves it) but I like it a lot better than WalMart.
The most glaring issue with your assumptions is that you are “assuming full-time employment for all employees”. This severly skews your numbers since Wal*Mart keeps many of their employees under the threshold of full-time in order to avoid paying benefits and other compensation (less than 45 percent of its workers receive company health insurance).
Well, this does not mean all of them are uninsured, does it? If they are second earners in the household, they often are covered by the insurance provided by the spouse. Sometimes they are military retirees covered by Tricare. Some of the older folks are covered by Medicare, and really only want to work part time.
The real question would be what percentage of these people need benefits from Wal-Mart and can’t get them. Do you have those figures, and are they much different from other companies in retail?
I can’t find exact numbers you ask for Mr. Moto, but judging from the number of kids of Wal*Mart employees on public assistance, I’d guess many employees could use insurance, especially insurance in which the lowest deductible available isn’t $1000 (as is the case with Wallyworld) With a wage of $12K-$15K, how can you afford a $1000 deductible?
http://www.usatoday.com/news/opinion/editorials/2005-11-06-oppose_x.htm?csp=N009
(bolding mine)
PeachCare for Kids is a state program to pay for healthcare for uninsured children.
I think they are doing fine. When unions were formed, workers were treated worse than serfs. They were paid slave wages, forced to work 12 or more hours a day, 6 days a week. There was child labor, unsanitary living conditions and appallingly dangerous working conditions. There was no health care, no pensions and no guarantees beyond day to day. Unions were desperately needed, and so they come about. Now however we have minimum wage, 40 hour work weeks, child labor laws, OSHA, employer provided health insurance, social security and unfair hiring and firing laws. Roll your eyes all you want, but really, what purpose do unions serve anymore? What wrongs are they redressing? None. The problem with unions is they have outlived their usefulness. By the time they had achieved what they needed to, they themselves had become entrenched bureaucracies spending much of their time doing nothing more than struggling to justify their own existence. Now, being a government worker, I know you love useless bureaucracies, but honestly, a lot of us think they should be done away with.
RTF, unions cost jobs. This is Econ 101 stuff, about as basic as it gets, we were studying this the fricking first week of econ class. When a union artificially increases the cost of labor, the demand for jobs goes down, there are less of them available. In addition, in many instances the union prevents new workers from getting certain jobs or from getting into specific professions, and they increase the cost of doing business, causing companies to be less competitive. Didn’t you study any of this stuff when you were going to Karl Marx University? 
You really want that? Because I’d be fine with that, as long as it works both ways. Let’s make every state a right to work state, and make union membership completely and totally voluntary on the workers part, with no reprisals or penalties for not joining. If unions are so great, they should have no trouble attracting members under those circumstances. What do you say, RT, are you willing to support true freedom of choice for the workers of America?
Yes, but this is countered that I assumed it for both companies.
You can change the hours worked for both companies (say, only 25 hours per week) and while it will change the absolute numbers, it won’t change the ratios. You’re right - it won’t cost WMT $35 billion to raise their employees to Costco’s levels… but even 1/3 that amount makes the company a dog and destroys their business model.
Price Club (where I used to work before the merger with Costco in 1992) also had employees that were part time, even under the guise as a union. Many employees started out with 6 days, 5 hours per day for a work week. At that time, Costco was non-union in California…and was more similar to Wal-Mart back then than now, but the 30hr/6day scheduling is still being used here locally. So, don’t assume that Costco has every employee working full-time either…maybe not as much as Wal-Mart, but maybe closer than you think.
Thanks for that data, Homebrew. It is very helpful.
Much better to have that to chew on than just have vague assertions that some Wal-Mart employees aren’t insured.
Hell, my company insures all of our employees that choose coverage, yet some choose other coverage than what we provide. No issue to anyone, as long as they are covered. It’s the ones who aren’t that are a concern.
You are aware that someone can find a tactic used by a company to be immoral and unethical even if it isn’t expressly illegal, yes? And you are also aware that someone viewing those actions may conclude that those actions are bad for the country (to stick to the OP) even if they’re not expressly against any laws, right?
Seems you’re saying that, since workers are doing great by comparison with the standards of the early 20th century, what more should they want?
Last time I checked, the minimum wage’s purchasing power was continuing to shrink; employers evade the limits of the 40 hour workweek with increasing frequency (and large numbers of employees are exempt from its protections); increasing numbers of employers are either cutting back on their employees’ health insurance coverage, providing ‘plans’ that are hard for their workers to afford, trying to get rid of employees with health problems so they don’t have to cover them, or not providing health insurance at all; social security was on the ropes earlier this year; and in most states you can be fired ‘at will’.
As Tracy Bonham would say, everythings fiiiiiiine.
I will concede that unions passed through that stage thirty years ago. So, what does that have to do with now? And again, why shouldn’t workers be the ones to decide whether one ‘entrenched bureaucracy’ can help them in dealing with a corporation that employs them, but emphatically does not have their best interests at heart?
Ah - an irrelevant ad hominem. That strengthens your argument. :rolleyes:
Well, this is the problem: everything that might benefit the workers ‘costs jobs’. Take the minimum wage - it costs jobs; at 15¢ an hour, nobody would be unemployed except by choice, but it sure wouldn’t do them much good.
When the minimum wage was last increased in the mid-1990s, unemployment increased hardly a whit. What this demonstrated was that we were at a point on the curve where almost all employers paying minimum wage were willing to pay more for labor than they were, but they weren’t (before the increase) because they didn’t have to. The law didn’t require it, and the power was with the companies who wanted to pay less, rather than the workers who wanted to be paid more.
In an economy such as this, where an increasingly large chunk of the wealth is sloshing around at the top, the reality is that the labor marketplace is full of situations where the employers are getting ‘good deals’ - where they’d be willing to pay more if they had to, but their duty to their shareholders, of course, is to not pay more if they don’t.
Individual workers have very little clout with an employer. But that’s what unions do: they turn the relationship into one between an employer and the employees as a group, which brings the power relationship more into balance, and enables the employees to get a better deal.
Then when they get that better deal, they go out and spend that money, and the economy as a whole prospers due to the usual multiplier effect. This is one of the reasons the economy usually does better under Democratic Presidents than under Republicans - as one gets richer, the utility of the next dollar declines, so less is done with it as a rule, in terms of stimulating the economy. So (at least up to a point that the U.S. has never come close to), more widely distributed wealth keeps the economy humming far better than narrowly concentrated wealth. But they didn’t teach you about that at Adam Smith U.
If you can come up with some mechanism to keep employers from interfering, threatening, or propagandizing in any way with their employees’ attempts to organize themselves or affiliate with an existing union, you’re on.
But until we’re in such a paradise where employers don’t use their muscle in ways subtle and unsubtle to divide and conquer their workforce, a union really has to be all or nothing.
I realize that everybody has equal power in Libertaria, so no one ever coerces anyone else. But back here in the real world…
Yer amusing. But this is equivalent to a Godwinism: if anyone who wants a little more power for the workers than they have in America in 2005 is a Marxist, then anyone who believes in using one’s military to invade another country is surely a Nazi.
So, what did they teach you in Adolf Hitler University, Dave? :rolleyes:
Just in case that last bit was too subtle for anyone (don’t know how, but…), I do not think Werddave is a Nazi. My point is just that it’s just as absurd and ridiculous an exaggeration to equate unions with Marxism as to equate, say, the Patriot Act or the invasion of Iraq with Nazism.
No matter how absurd it is, it’s worth nipping such argument-by-innuendo in the bud, IMHO.
What I dislike about many large national chains is that far more of their profits are drawn OUT of the communities where they’re located, than is the case with smaller more locally owned businesses.
The local store/restaurant buys more of its supplies and services locally. Their business forms, fliers and business cards are printed by the local printer. Their books/taxes are checked by the local accountant. And they have the flexibility to purchase products from smaller local manufacturers or wholesalers, produce growers, etc. Their buildings are designed by local architects and built by local contractors. The local silk screen place makes up their caps and sweatshirts. The business owners who live in town pay local property taxes on their homes.
There’s more to putting money into a community than simply paying a bunch of minimum wage employees. Local businesses contribute to their local economies by supporting other local businesses.
The only things Wal-Mart buys locally are water, electricity and fuel, because they absolutely have to.
I think Wal-Mart is bad for the country and the world as a whole, but I’m not sure it’s such a bad thing for rural communities like the one where I live.
For comparison, take the little town where I grew up, which is still too small to support a Wal-Mart. As such, it is full of the sort of mom-and-pop stores that Wal-Mart has replaced everywhere else. These stores, in a word, suck. They are dirty, overpriced, understocked, and no friendlier than your average mega-mart. I once had to scour all three local grocery stores to find something as simple as a can of black beans, and good luck finding fresh garlic that isn’t already half-rotten. (It should be said that even here, the true “mom-and-pop” stores are actually long gone, replaced by regional and smaller national chains.)
Now take my current home, a community similar in makeup but large enough to support a Super Wal-Mart. No, I can’t find complex Indian spice blends there, but it is literally the only place in town where I can find fresh garlic that hasn’t already sprouted or fresh herbs that aren’t rotten. In a town like this, Wal-Mart greatly increases the range of available goods.
The employees of those smaller stores are probably getting minimum wage with little to no benefits, so it would be hard to argue that those at Wal-Mart are worse off. It’s unfortunate that it takes money out of the community, but in a place that produces no retail goods at all, that’s bound to happen anyway.
I find a lot of Wal-Mart’s business practices abhorrent, and I think it’s bad for the playing field to have one competitor so large and influential that it basically sets the rules for the game. On a local level, though, I think we’re better off with it than we were without it.
Check that…I was at Costco this weekend, and they are still non-union in Victorville, CA.
I don’t have a problem with WalMart. The corporation provides goods and services that are in demand at a price that people are willing to pay. They also have employees who are willing to work for the wage they offer to pay. I can’t find much to argue with.
As to them “driving Mom and Pop out of business,” it has been my experience that stores that are closed as a result of competition from Walmart are often reopened selling goods and services that Walmart does not carry or provide.
laissez faire