Why does Wal-Mart want to expand into inner-city neighborhoods?

Great Debates
121

I want to elaborate on my last post, regarding artificially inflating the pay for low skilled jobs.

We can drill into our kids the need for education every day, but the most powerful message they can get is from the market itself. There may have been a time, 50 - 100 years ago, when retail jobs like store clerks were not considered low skill, and the market for those jobs were growing. In those days, a high school diploma was a big deal, and very few people went to college.

Flash forward to the present day. High school diplimas are a dime a dozen, and “store clerk” is one of the lowest skilled jobs around. Automation has eliminated a large number of these jobs and some stores even have self checkout lines. These are jobs from the past, and the last thing we want to do is to communicate to our kids, through artificially high wages, that these are destination jobs. If we mandated that every job, no matter the skill level, pay a living wage, we are essentially telling our kids not to bother with education-- you can lead a decent life without it.

Meanwhile, other countries will be surging ahead with automation and what makes us think that that automation is going to come from the US? More than liekly it will come from the environment that created the demand in the first place. The US has stayed on top of the economic heap by embracing new technologies and letting go of the jobs of the past. How many bank teller, telephone operator, and gas station attendant jobs just disappered because automation made them unnecessary? When a job starts paying a lower and lower wage, that’s the best signal we can send to a kids to not aspire to that kind of job in the first place.

There are always going to some people who, through no fault of their own, simply don’t have the brains to get the skills they need or who are temporarily in circumstances that force them into the low skilled labor pool. A wealthy society like the US can afford to be generous and make sure they don’t die on the street. But lets not fool them into thinking that a low skilled job is all they need to take care of themselves-- it’s not. And lets not make those low skilled jobs even more attractive to people who have better skills or who are perfeclty capable of getting better skills, and who will just push those truely disadvanted folks even further down the econominc ladder.

122

[QUOTE=Kimstu]
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.
[/QUOTE]

Laborers are rewarded for their marginal product. The more skills, experience, and talent a laborer can bring to the table, the more value he will deliver and the better he will be rewarded.

Business tools, technology, and education allow a certain part of the labor force to deliver far more value than it would have ten or twenty years ago. The same is not true for cashiers. They are probably no more productive, if not less productive, than they were ten years ago. The ratio of the marginal product of a cashier tohe marginal product of, say, a mid-level functionary in financial services has contracted sharply.

There is a critical value out there that represents a living wage. As prices and the demands of modern life have increased faster than the increase value that a cashier delivers, it is understandable that at a certain time, a cashier’s wage fell below this critical value.

It is not that WM jobs were designed by the Walton family not to provide living wages. In a highly productive society with a high degree of social welfare, jobs that see little or no productivity gains over time eventually won’t be able to provide a living wage.

The real shame is that so many people feel trapped by these kinds of jobs. This is the question that society must address, not the question of what to do with WM.

123

Do you have a cite for this? Off the top of my head, I’d be inclined to think that cashier productivity has in fact been substantially increased by “business tools and technology”. Scanners and “smart registers” allow cashiers to move goods much faster, and cashiers now routinely handle tasks like returned purchases that you used to have to go to the Returns Counter to transact.

I see your point in a general sense about stagnant productivity producing stagnant wages. I’m just not convinced it actually applies to the case of store cashiers, and would like to see some supporting evidence.

In particular, I’m dubious because it seems that in recent years, productivity increases have been largely decoupled from pay increases in many occupations. It sounds reasonable in theory to say that wage gains will track productivity gains, but it doesn’t seem to be reliably true in practice.

This argument implies that these low-paying retail jobs are on the way out, meaning that fewer and fewer people will end up having them, so it is less and less important for them to pay a living wage.

But is that true? According to the Bureau of Labor Statistics, although cashier employment is projected to grow more slowly than the average for all occupations, it definitely isn’t on the way out, or anything like it. Other low-paying, high-turnover jobs are also maintaining or gaining ground in the employment market. Counter and rental clerk jobs are growing faster than average. Food and beverage service jobs are growing as fast as the average, as are retail sales jobs. Even the supposedly obsolete bank teller is making something of a comeback. Meanwhile, skilled-trades jobs in production occupations, which tend to be higher-paid, seem to be in many cases actually diminishing.

Again, I see the general point about needing some low-skilled jobs to serve as low-paying entry-level positions, and so forth. What this doesn’t address, though, is the proportion of low-skilled, low-paying jobs in the workforce. If a growing percentage of jobs is considered low-skilled or unskilled and hence low-wage, then unless we have a growing percentage of workers who don’t need or want to make a living wage, we’ve got a problem.

124

…and yet we continue to have threads about bad customer service. Customer service is a skill.

125

[QUOTE=Kimstu]
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.
[/QUOTE]

John Mace said it. It means exactly what it says. No one should look to cashier at WalMart as their career. Perhaps they may try to take the entry-level position and grow internally - at which point they’ll earn more than entry-level wages and this whole conversation becomes moot - but they should not look at checking people out for 40 years at the local Wally World as the job that will put their children through grad school. Unskilled jobs are supposed to pay less than a living wage because supply and demand dictate they should. Minimum wage creates an artificial wage floor. As I said, it is unsound economic policy, but sound social policy. Minimum wage, for the reasons John stated, should not equal living wage.

126

[QUOTE=even sven]
…and yet we continue to have threads about bad customer service. Customer service is a skill.
[/QUOTE]

Yes it is.

That is why Macys pays more than WalMart, and Bergdof pays more than Macys.

127

[QUOTE=Kimstu]
This argument implies that these low-paying retail jobs are on the way out, meaning that fewer and fewer people will end up having them, so it is less and less important for them to pay a living wage.

But is that true? According to the Bureau of Labor Statistics, although cashier employment is projected to grow more slowly than the average for all occupations, it definitely isn’t on the way out, or anything like it. Other low-paying, high-turnover jobs are also maintaining or gaining ground in the employment market. Counter and rental clerk jobs are growing faster than average. Food and beverage service jobs are growing as fast as the average, as are retail sales jobs. Even the supposedly obsolete bank teller is making something of a comeback. Meanwhile, skilled-trades jobs in production occupations, which tend to be higher-paid, seem to be in many cases actually diminishing.

Again, I see the general point about needing some low-skilled jobs to serve as low-paying entry-level positions, and so forth. What this doesn’t address, though, is the proportion of low-skilled, low-paying jobs in the workforce. If a growing percentage of jobs is considered low-skilled or unskilled and hence low-wage, then unless we have a growing percentage of workers who don’t need or want to make a living wage, we’ve got a problem.
[/QUOTE]

Well, I probably should have said “growing relative to the labor force”. You have to remember that 100 years ago, most people worked in agriculture.

But the key point is that the market tells us, through the salary that companies offer, how any given job is valued by the economy. Low salaries (particularly when they are getting lower over time) mean lots more qualified applicants than jobs. The problem is, we don’t have a growing percentage of these low paying jobs (relative to the legal workforce), otherwise the salaries would go up. And, frankly, the immigration bill we’re considering is going to make things even worse. Not to say the bill is bad overall, but it will be really bad for US citizens with few skills, unless we can somehow stop the flow of low skilled workers across the border.

But getting to the matter at hand, is there any country out there that has successfully implemented legislation that mandates employers give their employees healthcare insurance? Don’t most countries that have universal healthcare coverage achieve that goal thru general taxes, not thru employer mandates?

128

I still don’t understand this position. If the amount of a wage is actually being dictated by the market forces of supply and demand, then what is the point of talking about how high the wage is “supposed” to be?

Conversely, if we are deliberately adjusting the wage to a level where we think it’s “supposed” to be, then we are distorting the operation of the market, and thus supply and demand are not dictating the wage level.

129

As far as I can tell, here in the Netherlands it’s a government/employer partnership, with basic coverage for all guaranteed by the government but operating mostly through group coverage policies provided by employers. I can dig around to see what the other socialized-medicine countries do.

(And btw, I offer a general apology to anybody I was unnecessarily snappish or dismissive towards in the posts of the past couple days. Sorry. Tonsillitis makes me irritable. :))

130

[QUOTE=Kimstu]
I still don’t understand this position. If the amount of a wage is actually being dictated by the market forces of supply and demand, then what is the point of talking about how high the wage is “supposed” to be?

Conversely, if we are deliberately adjusting the wage to a level where we think it’s “supposed” to be, then we are distorting the operation of the market, and thus supply and demand are not dictating the wage level.
[/QUOTE]

I think “supposed” is very poor wording, but I think I understand what he’s getting at. In a technologically advanced economy with automation making inroads into most low skilled jobs, it’s unreasonable to expect a low skilled job to pay a living wage if that job is priced at the market rate.

But let’s not get too lost on what a “skill” is. WalMart jobs don’t pay that much, but the going rate for housecleaners where I live is easily $15 - $20/hr*. How much skill does that entail? What it does entail is motivation, because many of the women (and it’s almost always women) operate their own business, requiring them to pund the pavement to generate clients and do that over and over again as they lose some clients. They have to be especially punctual and reliable, or they’ll be replaced. So, the skill being shown here is to see a need, capitalize on it, and make sure you do what has to be done to keep it.

If all you want to do is graduate form high school and wait until a job falls in your lap, you’re in a lotta trouble these days. I can’t see how giving people a strong incentive to do that is good for our society, good for the economy, or good for people such an action is suppopsed to help.

*I pay the woman who cleans my house $70 for 2-3 hours work.

131

[QUOTE=Kimstu]
I still don’t understand this position. If the amount of a wage is actually being dictated by the market forces of supply and demand, then what is the point of talking about how high the wage is “supposed” to be?

Conversely, if we are deliberately adjusting the wage to a level where we think it’s “supposed” to be, then we are distorting the operation of the market, and thus supply and demand are not dictating the wage level.
[/QUOTE]

I’ve said that. Minimum wage laws are bad economic policy but good social policy (IMO). I’m not going to try and guess what should be the ‘right’ level, but I don’t believe that the minimum wage should be a “living” wage.

[aside]John, you poor man. I get 6 hours for the same rate :p[/aside] Also, that is good wording. It is an unreasonable expectation in 21st century America.

132

[QUOTE=D_Odds]
Yes it is.

That is why Macys pays more than WalMart, and Bergdof pays more than Macys.
[/QUOTE]

Think, say, a 75 year old guy could get a job at Macys? Or maybe a pregnant Black lady? Is being young and attractive a “skill”? Waitressing, as another example, has a lot of potential for to make money with little formal training. Now, anyone that breathes can get hired at Denny’s. But at an upscale place- I could bring in a middle aged lady with a resume a mile long and a young blonde thing fresh out of school and the blonde will win every time.

Making enough money to pay the rent is not a strong incentive to stay at the lowest level possible. Most people want decent cars, to do good for their kids, nifty toy, etc. But not giving them enough money to make a living does make self-improvement nearly impossible.

Living in your car (not having access to sanitary facilities, a wardrobe, etc.) doesn’t make you more able to get a better job. Being malnourished doesn’t make you more able to get a better job. Bad teeth don’t make you more ableto get a better job. Not being able to front moving expenses to a more prosperous town doesn’t make you more able to get a better job. Not being able to take a day off now and then to go to an interview doesn’t make you more able to get a better job. Not having a car or money for a buss pass doesn’t make you more able to get a better job, nor does living in a far flung but cheap area. Working two jobs doesn’t make it more likely that you will get an education, nor that your kids will get the kind of care they need to escape poverty themselves.

The grim irony is that poverty brings on are also things that tend to make getting out of poverty that much less likely.

133

[QUOTE=even sven]
Think, say, a 75 year old guy could get a job at Macys? Or maybe a pregnant Black lady? Is being young and attractive a “skill”? Waitressing, as another example, has a lot of potential for to make money with little formal training. Now, anyone that breathes can get hired at Denny’s. But at an upscale place- I could bring in a middle aged lady with a resume a mile long and a young blonde thing fresh out of school and the blonde will win every time. .
[/QUOTE]

Try the same thing in Hollywood. So what?

You’re missing the point. Having attrictive sales people is only part of the fomula. That’s not why Macy’s or Nordstom’s pays more. It’s about higher end merchendise, attractive surroundings, and better customer service. The latter comes from more sales people per unit sales, and (possibly) better training.

134

[QUOTE=even sven]
Think, say, a 75 year old guy could get a job at Macys? Or maybe a pregnant Black lady?
[/quote]
75 year old - probably not, but he’s screwed wherever he goes. Pregnant black lady - few employers will take a chance on an obviously pregnant woman. However, if you said late 20s-early 40s black (or other etnicity) lady, that would describe most of the staff at the Macy*s I’ve been in.

You must not visit upscale restaurants (TGIFriday’s does not count). Other than checking coats and maybe tending bar, the wait staff is all “experienced” (which reminds me…time to make Mother’s Day reservations!).

135

[QUOTE=D_Odds]
You must not visit upscale restaurants (TGIFriday’s does not count). Other than checking coats and maybe tending bar, the wait staff is all “experienced” (which reminds me…time to make Mother’s Day reservations!).
[/QUOTE]

Eh. My friends are waiters at Chez Panisse and upscale Yakuza owned sushi bars. Experience will get you somewhere, but not as far as looking good.

Don’t you see how ridiculous it is to say “low wage workers should pull themselves up by their bootstraps if they want to pay rent” while at the same time acknowledging that the roads to advancement are closed off to a good chunk of them?

136

[QUOTE=even sven]
Don’t you see how ridiculous it is to say “low wage workers should pull themselves up by their bootstraps if they want to pay rent” while at the same time acknowledging that the roads to advancement are closed off to a good chunk of them?
[/QUOTE]
I’ve never seen a fast food chain yet that didn’t promote from within. If you’re not an assistant manager after 2-3 years in fast food, it’s because you don’t really want to be.

I’ve worked in several homeless shelters, and I’m very familiar with the catch-22s of extreme poverty you alluded to. Yes it can be hard; nobody denies that. But despite what people like to say about the endless cycle of poverty, the factremains that many people do break the cycle.

137

[QUOTE=even sven]
Eh. My friends are waiters at Chez Panisse and upscale Yakuza owned sushi bars. Experience will get you somewhere, but not as far as looking good.

Don’t you see how ridiculous it is to say “low wage workers should pull themselves up by their bootstraps if they want to pay rent” while at the same time acknowledging that the roads to advancement are closed off to a good chunk of them?
[/QUOTE]
I’ll give you the Sushi houses, even upscale. Can’t speak to Chez Panisse.

Good chunk? Only if a good chunk are 75 y.o. people who should, by that stage, be out of the workforce (in a need a full living wage way) and/or pregnant women (one is really screwed if one is a 75 y.o. pregnant woman - or has been really screwed or something like that).

And there is nothing wrong with saying that low-wage workers should pull themselves up. Perhaps they should make an effort to move to managing the stores they work at. Perhaps they should spend some effort looking into more education (GED or Associates - what are the financial aid packages, etc.).

You and I are going to keep disagreeing, because I believe that it is up to the individual to do whatever it takes (legally) to provide for themselves - it is not anyone else’s duty or obligation to do so (won’t complain when they help, but it is not manadatory).

138

[QUOTE=D_Odds]
You and I are going to keep disagreeing, because I believe that it is up to the individual to do whatever it takes (legally) to provide for themselves - it is not anyone else’s duty or obligation to do so (won’t complain when they help, but it is not manadatory).
[/QUOTE]

And I’ll keep on saying that if you are an employer, you do have some obligations to your employess, who are- after all- essential to your coninued wealth. Yes, people should do what they can to improve themselves and their situation. But I don’t consider working 40 hours a week (or whatever miserable hours your boss has assigned you) to be “slacking and screwing around”.

Agreed to disagree.

139

[QUOTE=even sven]
And I’ll keep on saying that if you are an employer, you do have some obligations to your employess, who are- after all- essential to your coninued wealth.
[/QUOTE]

That’s an excellent point. Business owners generally don’t treat employees like crap just for the fun of it. Typically, a business owner will have a certain goal for employee turn over rate. If you’re meeting that rate, then you’re probably doing things about right. If you’re not, then there are lots of reasons that could be the cause. It might be compensation, or you might have some crappy managers that piss off the people who work for them, or it might be the hours are too long or too short or not flexible enough. There are even some business owners who will tell you that taking care of health insurance needs is critical to employee productivity and/or retention.

The problem is, some people seem to want to insist on a one size fits all strategy, and to require employers to provide health care insurance to all employees. But even if we all agreed that we, as a society, want to provide that for all of our citizens, I’m just not convinced that making business owners pay that cost is the best way to achiece that social goal.

So it’s a three step process. First we have to agree that universal health insurance is a social goal we want, and then we have to decide how much we can afford afford. Then we have to decide what’s the best way to achieve that goal. Just launching into a declaration that all employers should provide health insurance to all their employees seems more like wishful thinking than sound economic or social policy.

140

[QUOTE=John Mace]
So it’s a three step process. First we have to agree that universal health insurance is a social goal we want, and then we have to decide how much we can afford afford. Then we have to decide what’s the best way to achieve that goal. Just launching into a declaration that all employers should provide health insurance to all their employees seems more like wishful thinking than sound economic or social policy.
[/QUOTE]

huh…and here I was under the impression all we had to do was soak the rich and utopia was in our grasp…

:stuck_out_tongue:

-XT