tag:blogger.com,1999:blog-1331441403058020963.post4579523351966660161..comments2024-03-28T06:49:24.930-04:00Comments on International Political Economy at the University of North Carolina: Walmart Workers Can't Be Paid Much More Thomas Oatleyhttp://www.blogger.com/profile/14092437150746625670noreply@blogger.comBlogger27125tag:blogger.com,1999:blog-1331441403058020963.post-54456230826279214632022-03-17T22:49:18.027-04:002022-03-17T22:49:18.027-04:00Good blog contain informative information for peop...Good blog contain informative information for people.I am regularly read your articles please check this also<br /><a href="https://www.wxynews.com/does-walmart-take-apple-pay/" rel="nofollow"> Walmart </a>Newspapersblog https://www.blogger.com/profile/07052610291800628179noreply@blogger.comtag:blogger.com,1999:blog-1331441403058020963.post-11981924220336247522020-09-18T22:48:02.627-04:002020-09-18T22:48:02.627-04:00We would like to acknowledge the exceptional servi...We would like to acknowledge the exceptional service that we received during the entire refinancing process. 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Walmart flat out doesn’t make enough money to pay their workers enough that they won’t be eligible for entitlements. Do you expect them to pay more but lose money?David xtreehttps://www.blogger.com/profile/01578919524561258476noreply@blogger.comtag:blogger.com,1999:blog-1331441403058020963.post-25161746583588353132019-06-03T03:22:57.165-04:002019-06-03T03:22:57.165-04:00other businesses that pay than Walmart do so becau...other businesses that pay than Walmart do so because they can afford to. Because they have higher margins. Costco for example. <br /><br />It’s easy to pay ten employees more than Walmart. But what about 1.4 million people?David xtreehttps://www.blogger.com/profile/01578919524561258476noreply@blogger.comtag:blogger.com,1999:blog-1331441403058020963.post-19825534725738851072019-06-03T03:18:55.013-04:002019-06-03T03:18:55.013-04:00You have completely ignored that the $4500 you are...You have completely ignored that the $4500 you are talking about would be better f Walmart operates at $0 profit. and if they did give every employee a &4500 raise, the government would still be paying for some entitlement benefits for their employees. This means that the only way for Walmart to pay enough that people wouldn’t be eligible for entitlements would be if they paid so much they they lost money instead of making a profit. <br /><br />I agree that the system sucks as it is. But there is LITERALLY nothing that Walmart could do to fix it. It’s jsit not possible. David xtreehttps://www.blogger.com/profile/01578919524561258476noreply@blogger.comtag:blogger.com,1999:blog-1331441403058020963.post-59331474755607871662019-06-03T03:02:07.429-04:002019-06-03T03:02:07.429-04:00Average cost for insurance on a group plan for a f...Average cost for insurance on a group plan for a family is about $14,000 per year. So if Walmart decided that it will use all potential profits to pay for healthcare for all employees and their families, it could only cover $4500 of the $1400. So each employee would have to pay about $900 per month. And that is if Walmart makes $0 profit. David xtreehttps://www.blogger.com/profile/01578919524561258476noreply@blogger.comtag:blogger.com,1999:blog-1331441403058020963.post-57644836003669633452019-04-18T09:15:16.292-04:002019-04-18T09:15:16.292-04:00I am Mariam,from what I can read. It has been sad ...I am Mariam,from what I can read. It has been sad news and scam to everyone about Voodoo casters or so. 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Have you been looking for a loan?Do you need an urgent personal or business loan?contact Fast Legitimate Loan Approval he help me with a loan of $78.000 some days ago after been scammed of $19,000 from a woman claiming to be a loan lender from Nigeria but i thank God today that i got my loan worth $78.000.Feel free to contact the company for a genuine financial Email:(urgentloan22@gmail.com)Mrs Sharon Simhttps://www.blogger.com/profile/03219645160084338174noreply@blogger.comtag:blogger.com,1999:blog-1331441403058020963.post-8063275674683887092014-04-10T11:27:46.569-04:002014-04-10T11:27:46.569-04:00While it may be not "complete", to me th...While it may be not "complete", to me this post provides the most clear and non-biased picture of Walmart and the arguments concerning their low wages. <br /><br />It is asinine to suggest that a company working off a 3% margin could simply take 1% of this margin and use it to raise wages. Plus, all of these half-cocked studies that use this 1% to raise the lowest wages don't take into account that if you raise the lower tier employees wage by $5/hour then everyone else who already makes more will need to slide up as well. Department heads, shift managers, drivers, etc., if the starting wage goes up so much the wages of employees with more tenure and more skills.<br /><br />Walmart's management is not the core and the crux of the problem, it is the manner in which we have re-structured our society. Over the years consumers have demanded lower and lower prices, which has resulted in the low margin/high volume model. We also consume a lot more than we used to, across all goods, which plays into the same model.<br /><br />Clearly it would be a good idea for humanity to strive to create a new reality that isn't based on consumer greed and corporate greed, but so many people want to have their cake and eat it too. <br /><br />Back when we bought 1 telephone every 10 years it made sense that a telephone manufacturer could charge a high margin on that product, and we were willing to pay higher margins since a household was buying 1 phone per decade instead of 25-30 like we are now.<br /><br />The more we buy the more we drive down margins and hence wages. There's no question that another 100 years of continuing our current model will leave the world in complete destruction, but this isn't because of Walmart, it's because of the new reality. <br /><br />Arbitrarily picking out a few industries/companies that pay lower wages and thinking we can redistribute their profits and we'll all be happy is asinine.<br /><br />I'm not saying we shouldn't strive towards creating a fairer world, where as many people as possible earn a living wage, but the root of the problem is in the way our society is structured (and not just the US, even more socialist countries have essentially the same issues) and not in the Walton family's ability to figure out how to distribute billions of dollars of goods more efficiently than anyone else. Mikehttp://geckorockresort.com/noreply@blogger.comtag:blogger.com,1999:blog-1331441403058020963.post-5275977851378768672013-07-28T16:34:39.489-04:002013-07-28T16:34:39.489-04:00Kindred:
Interesting post. I haven't followed ...Kindred:<br />Interesting post. I haven't followed all the debate in this comment thread.<br /><br />I think your characterization of J. Fox's pt as being that wages "are a social decision distinct from economic logic" is perhaps not *quite* right. I just read the Fox post and ISTM what he's saying is that the orthodox marginal-productivity theory of wage determination doesn't work well. He points out that there's been a divergence betw. wages and productivity growth in the US economy in recent yrs., a pt I've seen made by others (and no doubt you've probably answered it somewhere that i don't recall offhand).<br /><br />My point is this: I don't think Fox thinks that the era of Fordism is coming back or can be brought back, tho his reference to Ford at the end might suggest he thinks that. Rather, I think he's using Ford to make the general pt that there is no abstract "logic of the market" that sets wages at a particular level. Now as you observe, Walmart's business model is such that it apparently doesn't have a lot of rm to pay its employees more than several thou more a yr. But that's a different pt: a company's business model is one thing; "the logic of the market" as an abstraction is another. And it's the latter, ISTM, that is Fox's target. The post does not provide answers, ISTM, so much as seek to open more space for debate.<br /><br />Also: as I recall you say in the post (I can't pull up the text here) that Walmart pay averages $12.67/hr. In which case why does Walmart object so vehemently to the DC living wage law, which if i'm not mistaken sets the 'living wage' at around that level? I guess, to answer my own question, b/c Walmart wants to be free to pay its entry-level hires a lot less than 12.00/hr. LFChttp://howlatpluto.blogspot.comnoreply@blogger.comtag:blogger.com,1999:blog-1331441403058020963.post-69549233671520068132013-07-28T08:49:30.372-04:002013-07-28T08:49:30.372-04:00Why raise wages when the US Taxpayer will pick up ...Why raise wages when the US Taxpayer will pick up the slack ie welfare, food stamps, housing assistance, etc?<br /><br />In effect, US taxpayers are subsidizing walmart wages. The evidence is clear on this, epsecially walmart workers who have children at home.<br /><br />What's more, by subsidizing walmart workers wages, taxpayers are actually giving Walmart a competitive advantage over the taxpaying businesses that compete with walmart!!!<br /><br />It is a beautiful system that works perfectly for wally-world. Why mess up a good thing for them?Anonymoushttps://www.blogger.com/profile/13708668565114127471noreply@blogger.comtag:blogger.com,1999:blog-1331441403058020963.post-62272822580851497422013-07-26T14:48:00.619-04:002013-07-26T14:48:00.619-04:00And then of course if Y is variable in your model,...And then of course if Y is variable in your model, you gotta think about the Fed's and congress's reaction functions...Steve Rothhttps://www.blogger.com/profile/11895481216028771016noreply@blogger.comtag:blogger.com,1999:blog-1331441403058020963.post-71517766177970923442013-07-26T14:46:40.984-04:002013-07-26T14:46:40.984-04:00You're doing partial equilibrium. Assuming Y i...You're doing partial equilibrium. Assuming Y is fixed.<br /><br />Increased wages hence incomes could result in increased consumer spending so higher Y.<br /><br />Not saying it's so, but you can't do this without thinking about whether Y changes.Steve Rothhttps://www.blogger.com/profile/11895481216028771016noreply@blogger.comtag:blogger.com,1999:blog-1331441403058020963.post-6042686515906654532013-07-25T09:47:21.195-04:002013-07-25T09:47:21.195-04:00JR nailed it exactly: the structure of global capi...JR nailed it exactly: the structure of global capitalism has changed dramatically... the "left" (nearly 100% bourgeois really) argument hasn't adapted. At all. Neither has the right.<br /><br />Sorry, but cliche anti-corporatism/statism isn't going to do the trick any more. <br />Kindred Winecoffhttps://www.blogger.com/profile/14330671232391851377noreply@blogger.comtag:blogger.com,1999:blog-1331441403058020963.post-32230224070847352242013-07-23T22:01:11.124-04:002013-07-23T22:01:11.124-04:00It's probably true that many Walmart store ass...It's probably true that many Walmart store associates could be paid more and/or provided with better benefits. However, in Fox's piece he uses the example of Ford more than doubling factory workers' wages and how this helped bolster and create the middle class - basically an idea that Krugman and others have been advancing for quite awhile: The benefits and wages won by unions in the first half of the 20th c. were the foundations for the unprecedented growth during the 50s & 60s.<br /><br />What I think Kindred is getting at is that Wal-mart - and companies like it (i.e. not Costco) - don't have a business model that can support the type of wages and benefits won by the treaty of Detroit - in the present, the average UAW worker earns $25+/hour base pay, a decent pension, lifetime no deductible/no copay healthcare for themselves and their families, rather awesome overtime pay (sometimes as high as 2.5) etc etc.* Walmart shifting starting wages from $8.50/h to $12.50/h will obviously enhance welfare for those store associates (a good thing) - but it's a far cry from the contracts and conditions which allowed industrial manufacturing laborers to "create the middle class" in the 50s and 60s. In order to achieve something like that again, a new approach has to be taken as we are in a "new economy". I think that's Kindred's main point.<br /><br />That being said, I know little about Walmart's business model (or retail business in general) and the numbers behind it, so maybe he's right, maybe he's wrong (please don't accuse me of hating labor). Either way, certainly a line of inquiry worth pursuing IMO.<br /><br />*Not counting the recently introduced "second tier", which as of 2011 accounted for about 5% of GM's hourly workforce http://www.huffingtonpost.com/2011/08/25/uaw-contract-negotiations_n_936873.htmlJRnoreply@blogger.comtag:blogger.com,1999:blog-1331441403058020963.post-69135609541801744672013-07-22T06:39:26.136-04:002013-07-22T06:39:26.136-04:00"In order to get big changes in distribution ..."In order to get big changes in distribution you'll need huge changes in policy; a $10 or $12 minimum wage isn't going to cut it, and unionization won't either (because there just isn't much to negotiate over). These things can help around the edges, but that's all."<br /><br />This is where you get into trouble because you're closing off a discussion in an area that you don't seem to particularly understand. That's not a scientific approach and it invites the kind of pushback you're getting. Plus, $4500 a year is a lot to negotiate over-- or are we paying academics so much that that doesn't matter to them?<br /><br />Wal-Mart's retail model has two foundations-- low-cost, high volume and a vast array of products and services which includes some labor intensive offerings. Many retailers, unionized and not, pay people in their higher skill and higher-productivity departments noticeably higher wages than those in services outside the core. Wal-Mart could do that and keep all its people. <br /><br />Or, Wal-Mart could shed low productivity services, which you've suggested would lead to "fewer jobs" without factoring in that those services would generally return to small businesses.jdwhttps://www.blogger.com/profile/14371972974472693564noreply@blogger.comtag:blogger.com,1999:blog-1331441403058020963.post-65079854968660405302013-07-21T23:10:04.842-04:002013-07-21T23:10:04.842-04:00Chill out.
By saying I really care about the bro...Chill out. <br /><br />By saying I really care about the broader macro phenomenon rather than the particulars of Walmart I wasn't being disingenuous: I was accepting the added nuance of the commenters as being useful. Which is why I thanked them. But we really are seeing a different form of capitalism than we've seen in the past. That's worth considering too.<br /><br />All the numbers I used have references in the post. I'm dealing with averages here, which are crude measures of course (which is why I thanked Lee for the additional reference), but the "specifics" are accurate as far as I can tell.<br /><br />As for "twisted logics", well that's why I said that this was a social decision in the first paragraph and then said why I preferred the term "political decision" in the last paragraph. Many people have appealed to the Costco example as a viable alternative. The Costco model implies fewer workers per store, higher renumeration for the workers they do employ, and fewer products for sale. We could legislate towards the Costco model if we wanted to, but there would be downsides: fewer people with jobs (on a per-store basis) and fewer items to buy. <br /><br />My point is that *under the current high volume/low margin model* renumeration can't go up much for large numbers of workers. That's because Walmart's profitability is all based on volume, not on margin. As a percentage of revenues they aren't all that profitable.<br /><br />I.e., Walmart is in the top 10 American corporations in terms of overall profit. But they aren't in the top 50 in terms of profit as a percentage of revenues:<br /><br />http://money.cnn.com/magazines/fortune/fortune500/2012/performers/companies/profits/revenues.html <br /><br />That list ends at 50 but Walmart isn't even close: #50 has ~500% the return on revenues that Walmart has. With small margins and tons of workers there's just not a whole lot that can be redistributed per worker.Kindred Winecoffhttps://www.blogger.com/profile/14330671232391851377noreply@blogger.comtag:blogger.com,1999:blog-1331441403058020963.post-91489230091797353392013-07-21T22:41:37.951-04:002013-07-21T22:41:37.951-04:00If you're not going to bother to do the actual...If you're not going to bother to do the actual research to look at the specifics of wages, working hours, etc at Walmart, you probably shouldn't write a blog post flatly declaring that Walmart workers "can't be paid much more." When people call you out on your misleading figures, you then claim you're not actually interested in Walmart per se - which is pretty disingenuous to say the least. <br /><br />Second of all, a pretax wage increase of $4,500 a year is pretty significant for low-income families. Yes some might be priced out of federal aid programs, but under what twisted logic does one of the country's largest and most profitable corporations get away with forcing its employees to survive on federal benefits? <br /><br />The HBS poster is absolutely right - these are social decisions in the sense that there is no inherent economic reason that, at the least, workers can't be paid a little more and treated with dignity. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1331441403058020963.post-20774824637527280472013-07-21T16:37:49.761-04:002013-07-21T16:37:49.761-04:00Thanks for the comments folks.
All of your speci...Thanks for the comments folks. <br /><br />All of your specific criticisms could be right and I wouldn't mind. I'm not all that interested interested in Walmart per se, and all of the calculations made above are very much "back of the envelope". <br /><br />What I'm really interested in is the shift in the economy towards high volume/low margin models. It's been around for awhile -- think Woolworths and other five-and-dimes back in the day -- but only recently has this model combined with global production chains to operate on such a massive scale. Two-thirds of the country shops at Walmart every month. 1% of the total labor force works at Walmart. That's big. <br /><br />The increasing prevalence of the high volume/low margin model has implications for the capital-labor distribution of income. It's not like earlier periods in capitalism. It's a different set of relations. The Walmart/Amazon/Google model is not based on capitalists using monopoly power to exploit workers. These companies are operating within a highly competitive market, where survival depends as much upon capturing efficiency gains from scale economies than anything else. The old "we need unions" story might not apply today in the same way that it has in the past. This is more like superstar economics, with the Walton family as the superstars. <br /><br />The comparison between Costco and Walmart is somewhat misleading. Costco charges customers a $55 membership fee (from which they get $2bn/year in revenue)... Walmart doesn't. Costco has fewer than 650 stores... Walmart has nearly 11,000. Costco has 160,000 workers... Walmart has more than 2.1 million. Costco is a quasi-cooperative warehouse wholeseller that specializes in bulk, while Walmart is a retailer that focuses on volume. Costco sells many more high-end (i.e. high margin) items than Walmart, and has a richer customer base. Costco sells around 4,000 items which they sell in bulk, while Walmart sells around 100,000. Costco makes about three times as much revenue per employee as Walmart (which is why they're able to pay more while still operating on low margins). A direct comparison between them probably isn't fair; they have two different business models, and what "works" at smaller scales doesn't always work at larger scales. Maybe it could, but that remains to be seen. No wholeseller has ever existed at the scale Walmart is at. <br /><br />But even still, the most you can say is that Costco is that it's a somewhat-better version of Walmart. Costco is still a low margin business. If you look at a comparison of what their workers actually receive -- in terms of health care, unionization rates, etc. -- it's not quite as stark of a difference as folks often seem to think. Salaries tend to be higher, but they employ far fewer people both in aggregate and on a per-store basis. <br /><br />On other points, I would first suggest that folks read Jason Furman, who is now in the Obama administration and is certainly not a right-wing free-market shill for corporate oppressors. The study that Lee linked (thanks!) shows that Walmart shoppers are "disproportionately middle- and lower-income. (Costco shoppers average $85000/year in income.) It suggests basically the same thing as me: Walmart workers could be paid around $4,500/year more -- they estimate between $1670 and $6500, so the mean point estimate would be a bit lower than I was working with. Whether that's a qualitative difference in standard of living is in the eye of the beholder, I guess, but also remember that higher wages around this margins means eligibility for fewer federal aid programs. In any case the net result is not huge. <br /><br />In order to get big changes in distribution you'll need huge changes in policy; a $10 or $12 minimum wage isn't going to cut it, and unionization won't either (because there just isn't much to negotiate over). These things can help around the edges, but that's all. Kindred Winecoffhttps://www.blogger.com/profile/14330671232391851377noreply@blogger.comtag:blogger.com,1999:blog-1331441403058020963.post-64892640084969049962013-07-21T15:57:16.056-04:002013-07-21T15:57:16.056-04:00This post reminded me why I don't read this bl...This post reminded me why I don't read this blog on a regular basis. The post has do many problems, as the previous commenters made clear. Kindred's an idiot. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1331441403058020963.post-87360186846870433562013-07-21T15:43:12.654-04:002013-07-21T15:43:12.654-04:00"Walmart Pays Workers Poorly And Sinks While ..."Walmart Pays Workers Poorly And Sinks While Costco Pays Workers Well And Sails-Proof That You Get What You Pay For" <br /><br />"Apr 24, 2011 - Walmart's labor costs amounts to about 1 percent of the company's annual sales of $305 Billion" <br /><br />"Walmart wages are so low that many of its workers rely on food stamps and other government aid programs to fulfill their basic needs, a reality that could cost taxpayers as much as $900,000 at just one Walmart Supercenter in Wisconsin"<br /><br /><br />Those three headlines sum up Walmart IMO. Costco succeeds very well while paying their staff appropriately, while Walmart in essence dumps a lot of their overhead back on US tax payers for food stamps and medicare. <br /><br />Consider this..If Walmart doubled it's salary across <br />the board for all workers, it would raise their labor costs from 1% to 2% of sales. In other words, if they passed that 1% on to buyers, a 99 cent bottle of Snapple would "JUMP" to $1.00. Seriously? That would crash Walmart? <br /><br />What the article ignores is (1) Most employees do not work 40 hours and do not earn the average quoted, (2) You don't have to raise everyone's salary..Just raise it incrementally from the bottom up and (3) What kind of an idiot would applaud Walmart shifting the costs of their very profitable business onto the backs of the taxpayer? Anonymoushttps://www.blogger.com/profile/05850061548373752817noreply@blogger.comtag:blogger.com,1999:blog-1331441403058020963.post-73612330503499653482013-07-21T15:03:55.930-04:002013-07-21T15:03:55.930-04:00So I think taking the average wage is a bit mislea...So I think taking the average wage is a bit misleading in this situation, since you're combining the lower-level employees (store associates, etc, making about 8-21K/year[1]) with upper management, who is prob. making around 40+K a year (my assumption) and firmly in the middle class.<br /><br />Also, adding an extra 5K to wages (moving from 25K to 30K) is a 20% increase in wages. While that may not be considered a qualitative difference (US Federal Poverty Line calculations may say otherwise though O_o), I would not dismiss that as insignificant. <br /><br />Absent from your analysis in the second to last paragraph is the passing on the cost of raising worker's wages to the consumer. If this is done in a manner that tries to maximize social mobility (like in the paper below), and not an across the board average wage increase, you could bring wages for entry-level rank-and-file Wal-Mart workers to $12/hour at a cost of 46 cents per customer per trip.<br /><br />[1]http://laborcenter.berkeley.edu/retail/bigbox_livingwage_policies11.pdfLee G.https://www.blogger.com/profile/12192452509591181308noreply@blogger.com