It doesn’t affect the claim. It’s a level playing field.
WalMart succeeds because it works within the established framework and attracts a huge revenue base. People buy from WalMart because it is cheap. There is no incentive to WalMart to either increase prices or increase expenses.
I do not ascribe the morals to the corporation. I ascribe the morals to the patrons of WalMart. If you disagree with the WalMart model (which I do), do not buy from WalMart (which I don’t). Don’t blame WalMart, however, for maximizing a successful model.
Here is where we mostly disagree. I do see the point - if the model is so bad, then it is up to the people, through government or through grass roots movement, to change the basis on which the model operates. If this means forcing WalMart to offer health insurance, so be it (as long as the state doesn’t target only WalMart, but all similar establishments). If it means higher minimum wage laws (another topic for debate), so be it.
I agree with some of the commentary in the article, but I do have an issue of the universe they compare to WalMart. The definition of large retail store is 1,000 or more employees. Quite frankly, that is going to skew the results against WalMart, with 930,000+ employees.
From the study:
I do agree with this. I’m in the minority. People, including professional investors, chase short-term goals. That could be the lowest price, regardless of long-term effect on the economy, or it could be next quarter’s numbers. To reiterate, I do not fault WalMart for its business model; I fault the factors that made the business model successful.
Please. I’ve never seen you pull crap like this…you are generally a good poster. I asked you a basic question which you dodged with some bullshit about Bricker (who isn’t even in the thread afaik). Then you talk about lawsuits against Walmart which you seem to think proves your point. To me it proves the system works. IF Walmart is guilty (which you seem to be assuming they are) then they will have to comply with the law by changing their practices and probably pay a fine. Its all good, no?
Where do you get this stuff? Employees make their own determination as to the worth of their labor. If Walmart is the only place they can work then without the Walmart THEY WOULD NOT BE WORKING AT ALL. That seems to indicate that (waving aside the issue of whether or not your arguement actually has merit…which I’ve yet to see solid proof on) without the Walmart these folks would be completely subsidized by the government.
My irony meter is exploding here. The system we have is one YOU advocate…i.e. the whole ‘safety net’ thing. If it ‘resembles Soviet practice’ (which is just ridiculous) then what does that make you folks who are so gun ho about it?? No, its not ‘the free market’…you guys don’t LIKE a completely free market, remember? You WANT that safety net there…hell, I frigging want some kind of safety net for that matter. There aren’t too many except at the lunitic fringe who don’t want any kind of safety net at all.
But really, to point to the fact that Walmart is somehow not a good example of a free market company because they have to work within a system YOU (and I and just about everyone) advocates and MAKES them work within…well, its just silly. They comply with the existing laws (and if they don’t then they are open to legal action…again, part of the system). To ask them to go beyond those laws or else they aren’t a good example of a free market company is totally bonkers. They pay the minimum for labor that they can, enabling them to sell their products at thinner margins…and thus increasing their market share in the business niche they have chosen. This is the very DEFINITION of a good free market company…and one who is having to work in something less than a completely free market!
No. Competitive markets increase social welfare. Depending on the circumstances, market advocates should be agnostic with respect to how these benefits will be distributed. In less competitive markets with strong redistributory tendencies, how resources are distributed is a political rather than a strictly economic exercise.
The fact that WalMart employees are on public assistance does not undermine WalMart’s success story from any measurable economic standpoint. What matters, as D_Odds suggested before, is not the fact that WM employees are on public assistance but what the change in public assistance registers was after a new WM opens. In order to demonstrate that WM does not create value, one must show that the increased public assistance burden offsets the value that WM delivers.
This is not an easy case to make.
I do not like WM, I do not shop there, and I do not, to the best of my knowledge, own any WM stock. Nevertheless, I do not understand the idea that everywhere else, employees earn their marginal product except at WM, where the least skilled sector of the labor force ought to make more.
I would also like to add that not every job can provide an individual or a family a living wage. Minimum wage != living wage. In a free market, pay will match desire for a particular skill and the scarcity of that skill. That’s why sports players earn so much - great desire, scarce skills (How else can you explain a sub-mediocre left-handed middle relief pitcher commanding several million dollars a year?).
WalMart, McDonalds, Target, CVS - these are unskilled jobs. That means, in the US, there are 300 million people that could do the job. There is a lot of competitive pressure to depress the wages. The fact that these jobs actually pay above federally and/or locally mandated minimum wage suggests low unemployment and competition for an unskilled worker pool.
Unfortunately, what yellowval didn’t bother to point out was that Wal-Mart can achieve Costco-level “wages” by either:
Paying an additional $25 billion/year in wages (note that this is 2.5 times their entire profit).
or
Lay off 600,000 people, give the “savings” to the rest.
Costco and Wal-Mart aren’t even in the same retailing category: even financial simpletons can look at dollar volume per employee ratios and tell that a company that sells $158,000 worth of goods per employee (as WMT does) is a different creature than one that does $432,000 employee (like Costco).
As a matter of fact, the question should actually be why doesn’t Costco pay as well as WMT, per unit of sales? If the avg WMT employee gets $8/hour to move $158,000 in goods, then that means that a Costco employee should receive $22.88 per hour to move $432,000 worth of goods. Those greedy Costco executive bastards, ripping off from their employees!!!
You can look at it another way - Costco is contributing to higher unemployment by means of sweatshop labor practices: By working their few employees like dogs, they can remain competitive with WMT, a company that demands that their employees sell 60+% less than Costco. Why can’t Costco hire enough employees so they, too, are only responsible for $158,000 in sales per year? Why does Costco hate their employees so, to demand so much from them, for so little (relative) pay?
No, I was just pointing out that the question “what laws is WalMart breaking?” is a red herring. Nobody’s claiming that paying low wages per se violates any laws.
Absolutely. And if WalMart depends on the government safety net to be able to operate successfully, then it is not any kind of poster child for an unregulated free market. Which means that cries of “don’t let the government interfere with WalMart’s free-market wage and price operations!” are not very convincing.
Why on earth should that be the question?
Right, but that means that the more people we have making minimum wage, the more the government will need to subsidize them if they’re going to be able to make ends meet. If unskilled work does not pay enough to live on, and a lot of workers are unskilled, then we have a problem in terms of economic prosperity.
Curious. Becuase I see all kinds of businesses operating in the immediate vicinity of various WalMarts. Typically, in this scenario, there are a half-dozen some businesses all sharing a parking lot with WalMart - many of them small franchise outlets and other specialty stores.
The onus should be on the workers to develop skills, not on the employer to make up for their lack of skills. Government already pays for the foundation to develop the skills through education. If someone does not take advantage of establishing that foundation, or of building upon it, don’t lay the blame on corporate America for not providing for them. People who willingly turn aside opportunity make it harder on the social programs to provide for the people unable to take advantage of opportunity.
Unskilled, low-pay jobs are not meant to be a sole source of income. This is not to say that a skilled worker might find him/herself in the position of relying on such a job due to unforeseen circumstances. However, don’t make these jobs into more than they are.
Kimstu, I honestly think you are just erecting a giant strawman with this argument. I don’t know of anyone who argues that the free market will or should produce only jobs that pay high enough for the worker to afford the kind of health care you want them to have. The free market is a great wealth producing mechanism, but it is not intended to be a wealth distribution system.
Most of us free market types on this board are not strict Libertarians, so I don’t know why you are arguing against that position. What I want is for the government not to interfere in the setting of wages and prices to let the market work its “magic” of producing wealth, and then use taxes raised from general revenues to build a social safety net that we, as a society, agree we want.
The requirement that each and every job must pay a living wage in order to have that job qulaify as “validating the free market” is a requirement you have made up.
Now, if you want to entice **Liberal **back onto this board, you can argue about a free market with no social safety net. AFAIK, there aren’t any regular posters who take the position he does.
Lets just agree to disagree on who’s was the red herring and push on…ok?
They don’t rely on a government safety net to operate successfully…not unless you want to try and claim that if there was no safety net then Walmart would have absolutely no employees. Their business model (including wage scales, product pricing and employee benifits) is predicated on them turning a profit…and its divorced from what the government does or doesn’t do wrt a social safety net.
BTW, who said ‘don’t let the government interfere with WalMart’s free-market wage and price operations!’? Are you quoting me there or someone else…or did you make that part up? I looked back through the thread but didn’t see anyone saying that here.
The fact of the matter is that the government DOES interfere with Walmarts (and every other companies) wages directly and product pricing indirectly…through mandatory MW laws and through taxes. It would be kind of silly to cry out not to have the goverment do something its ALREADY doing…and doing essentially across the board for all US based companies.
That should be the question because what the numbers are telling me is that Costco and Wal Mart aren’t even in the same retailing category: to make comparisons between the two is to overlook some obvious truths.
However, in the attempt to make them argumentatively comparable, the onus seems to be always on Wal Mart in raising their payscales to match Costcos. In another thread on this board, I noted that for Wal Mart to do that they would have to do what I said above (either give the employees raises that would destroy the company or fire 600,000-odd people).
But the numbers give us another option, one that is never mentioned: The financials show that Costco employs 63% fewer people per units of sales than Wal Mart: Costco, if they wanted to match WMT’s employment prowess, would have to hire 2.7 times as many employees - think about what that would do to local employment!!
Of course, it would destroy Costco. And I’m sure you understand that. What I’m trying to point out is that your “demands” for higher pay for all employees to match Costco’s levels would destroy Wal Mart, which I don’t think you understand. (Or you do and you don’t care/ or want to destroy WMT).
In short: you can’t deny reality. Especially financial reality.
kimstu, if I understand you correctly, your central thesis seems to be that without goverment subsidized healthcare for the poor, Walmart would either have no employees or be forced to pay higher wages. Is this correct? If so, can you outline your reasoning behind this?
Then we can’t afford to have too many of them, unless we are willing to increase tax-funded income supplements for a large part of the workforce.
I’m also dubious about the casual use of the term “unskilled” to justify low wages, especially when low-wage jobs replace comparable jobs at higher wage levels. As the report I cited indicated, many retail jobs comparable to WalMart’s pay higher wages and benefits. Are you arguing that those workers are overpaid?
If you’re making a simple supply-and-demand argument to the effect that whatever wage a company is willing to pay its workers, or can get away with paying them, is the wage that they’re entitled to, that’s one thing. But if you’re trying to argue that unskilled jobs by their very nature aren’t “supposed” to pay workers enough to live on, things get a little trickier.
Not necessarily. It might instead just end up with a poorer, sicker workforce. That might well cost them in terms of higher employee turnover and reduced sales, but I couldn’t predict exactly what the outcome would be or how WalMart would respond. However, my basic point stands that WalMart is indeed depending on government-subsidized social services, which affects how poor and sick its workforce is, which affects the performance of its business model.
John Mace, xtisme, what started this whole phase of the discussion was yellowval’s response back in post #68 to WillMagic’s claim that anybody who objects to the growth of WalMart must hate poor people. Which naturally led to the question of whether the WalMart model of low prices and low wages really is the best thing for poor people.
I’m not. I’m not accusing anybody here of wanting to abolish all taxes or tax-funded social services. But I do think that a number of posters are making arguments to the effect that market wages shouldn’t be regulated at all (or even criticized, it seems).
Up to a point, I agree with this principle. However, I’m highly skeptical about its validity as an argument against all wage regulation, especially at the low end of the wage scale. And that’s primarily for two reasons:
It divorces social safety from paid work. If the wage floor is so low that workers and non-workers alike need tax-funded support services just to meet their most basic needs, then work is perceived as less rewarding. One thing that I think we as a society want is acceptance of hard work and earning one’s living as universal social norms. If full-time work doesn’t actually provide a living for many workers, then those norms are undermined.
It makes social benefits more vulnerable to class animosity. Many non-poor people are apt to think of tax-funded social benefits as “handouts” bestowed on the undeserving, and of low-wage workers as losers or shirkers who simply haven’t made the most of their opportunities. Even if the cost to taxpayers of a high wage floor was exactly the same as the cost of more welfare assistance with no wage floor, most taxpayers would feel less resentment of the working-poor beneficiaries in the first case than in the second.
Look at D_Odds’ most recent post as an example of the widespread assumption that low-wage work is generally associated with “lack of skills” and “willingly turning aside opportunity”. (I’m not saying D_Odds personally believes that, of course.) A full-time supermarket clerk, say, with a union job and a lower-middle-class salary is generally perceived as a hard-working, responsible citizen. If WalMart drives that supermarket out of business and the same clerk has to take a WalMart job at poverty-level wages, his/her image now changes to an “unskilled” unsuccessful person who probably wasted his/her opportunities. Taxpayers resent providing benefits to “losers” like that—even though this may be exactly the same person working just as hard at a comparable job, but now without the aura of respectability that a living wage provides.
These reasons are why I think that some amount of wage regulation is defensible as opposed to an unregulated wage market, which is why I think it’s valid to ask whether WalMart ought to pay its workers better, which is why I think that the insufficiency of WalMart wages to provide basic needs is relevant to whether it really is a “free market success story”.
It is not the case that health care is necessarily part of any compensation package, and that the free market requires that anyone without employer-provided health care get it from the government. That’s a straw man.
The study defined large retailers as a retailer with more than 1000 employees. That means that Pep Boys’ employees, who (hopefully) have with a specific knowledge set (aka a skill) are compared with the checkout clerks at WalMart. That’s an unfair comparison. Hell, it is even unfair to compare Saks to WalMart. Saks expects, and pays for, a better employee pool than WalMart. The problem comes when WalMart might force a Saks to close, for whatever reasons. Now you have Saks-level workers stuck at WalMart jobs.
To answer the opening paragraph, yes you can have abundant non-living wage jobs in a society. The problems is when someone has to rely on such a job for a living. High school / college students generally don’t need a living wage. A household looking for a secondary income source doesn’t need a living wage. Pensioners looking to supplement their retirement income don’t necessarily need a living wage. Most of these should have other sources of income coverage.
I will repeat - these jobs, whether at WalMart of the displaced grocery store, are not meant to support even a low middle class lifestyle.
The supermarket clerks I’m familiar with work in NYC and LI. None of them would come close to a low-middle class wage based on the area, even though unionized. Can’t speak for other areas of the country, though. But that’s besides the point…
If you are a supermarket clerk, you need to have different expectations. This isn’t a job to keep a three bedroom apartment and raise two children on. This is the job to barely makes ends meet while single and sharing an apartment. If you are a super graphic designer, but need to take a supermarket job, you need to ask yourself ‘why?’. Are your skills not needed where you are? Are there too many graphic designers where you are? Have you gotten fired from every graphic designing job in your area because of your work or interpersonal habits? None of these are WalMart’s (or McDonald’s or Sears’) faults.
First, WalMart does work under wage regulation. It is called minimum wage. I think it is bad economic policy, but good social policy to have minimum wage laws (same with rent stabilization laws, even though I’ve moved into homeowner status). However, I disagree with your assessment. Any and every employer should pay its employees the least amount of wages and benefits necessary to employ a workforce to achieve its goals. Each employee should seek to maximize his wages and benefits from their employers (whether through collective bargaining or providing not easily replaced skillsets).
But they do. You can’t just say “Oh, well my business wasn’t meant to follow health regulations” or "Oh, this company wasn’t meant for Black people."or “Well, this business doesn’t make enough to pay property tax.” There are costs to doing business. Some of these costs are affected by the government. In my mind, paying your employees enough to support themselves is one of those costs of business that you need a plan. And I don’t think anyone who works is worth less than an roof over their head.
That’s the “simple supply and demand argument” that I referred to earlier. But if that’s your position, then I don’t understand what you meant by this previous remark:
What does it mean to say that “these jobs are not meant” to support any particular level of lifestyle? “Meant” by whom?
If it’s simply about supply and demand, that’s one thing. If you’re trying to argue that unskilled jobs are intrinsically “supposed” to pay less than a living wage, then I don’t understand your argument.
Low skilled jobs aren’t inherently low pay, but they almost always suffer from over supply. By definition, anyone in the labor force can do a low skilled job.
I have not been participating in the “why do you hate poor people” debate. My interest has been in understanding the claim, made in post #71, that WalMart should be providing healthcare for its employees. No one has yet provided a satisfactory answer to that question.
Possibly. But most WalMart employees make higher than MW, so it’s not really relevant to this particular discussion.
The problem with your approach is that it is too blunt. Why should the pay for any given job be required to be at a level to support a family? There are lots of people who work part time (or even full time) to earn extra money for a family with a primary breadwinner. By artificially raising the pay of those low sklilled jobs you then make them even more attractive to people who actually don’t need them.
Frankly, I don’t think we as a society benefit from artificially making cashier jobs pay well enough to support a family. Those should be entry level jobs that are stepping stones to careers that require more skills, and where the labor pool isn’t so saturated. You also end up artificially suppressing automation, which puts the country behind the technology curve. It’s entirely possible that cashier jobs will disappear almost completely in the next generation or so. Why should we be training a generation of cashiers for jobs that may not even exist?
Once again you have imposed a measure of success that free market advocates simply do not accept. If you want evey job to pay a living wage you are not talking free market economincs. It is factually incorrect to call this a market failure in the same way it would be incorrect to call modern medicine a failure because some people still get sick.
My irony meter is exploding here. The system we have is one YOU advocate…i.e. the whole ‘safety net’ thing. If it ‘resembles Soviet practice’ (which is just ridiculous) then what does that make you folks who are so gun ho about it?? No, its not ‘the free market’…you guys don’t LIKE a completely free market, remember? You WANT that safety net there…hell, I frigging want some kind of safety net for that matter. There aren’t too many except at the lunitic fringe who don’t want any kind of safety net at all.
Why on earth should that be the question?