JF wrote:+ If a Walmart opened in Shirlington and it paid less than other retailers, are you suggesting that workers would leave their purportedly higher-paying jobs at Best Buy, Target, Giant, etc. to go work at the lower-paying Walmart?”
“Or are you suggesting that Best Buy, Target, and Giant would lower their wages to match Walmart?”
Possibly. Wages, like prices, are set by the market.
Stay with the larger picture. With lower PRICES to go with the lower wages, Walmart would push Best Buy, etc. to lower their prices too, to compete. To do that, they’d need to lower wages as well. Or they go out of business, leaving Walmart as the only employer left, and the low Walmart wages. That’s how wages get pushed down.
This is normal competition. I don’t have any problem with that. I don’t think Walmart is responsible for the wage stagnation – they’re just a symptom of the larger problem. That larger problem, as I’ve said, is 30 YEARS of NO growth in wages for the bottom 90 percent!
“As far as I can recall, adding demand for something usually causes its price to rise. Therefore, adding another employer to an area would increase demand for employees, therefore causing wages to actually increase, not decrease as you suggest.”
So why are wages not growing? Have you seen a documented case of wages growing when a Walmart comes to a town? The fact is that in this economy, a new Walmart means jobs for the unemployed, not better wages for the employed, because unemployment is high and nobody is demanding higher wages. Again, jobs are great. I don’t have a problem with jobs at all. But something is wrong in the long run. The problem is that what you describe – wages growing with an increase in jobs – doesn’t happen, even though it should.
The reason isn’t lack of wealth. Walmart has plenty of that. The reason is its workers don’t get as much of a share of what they produce as workers used to, back when we were building a middle class instead of slowing tearing it down.
@sanabelt wrote, “The reason isn’t lack of wealth. Walmart has plenty of that. The reason is its workers don’t get as much of a share of what they produce as workers used to, back when we were building a middle class instead of slowing tearing it down.”
I see that as the issue also. The issue isn’t just Walmart, but many similar large box stores, and others. But, Walmart is the poster child because they are the largest overall employer in the USA, and the biggest employer in 25 states. (source: [no date] http://www.businessinsider.com/16-walmart-facts?op=1#ixzz2f6dhafVc ).
I don’t think anyone would (could) argue that Walmart sets a high standard for employee pay or benefits.
Also, a peer reviewed paper from U of CA estimated that store openings reduced average earning and health benefits of retail workers by .5 to .9 percent. The reduction was mostly due to decline in retail wages, not the skill level of the employee. http://escholarship.org/uc/item/22s5k4pv WalMart reduced the take-home pay of retail workers by $4.7 Billion dollars per year.
This low pay results in employees depending on public assistance programs. For example just in California, $86 Million annually for heath expenses and other assistance. Walmart’s own Board of Director’s report states that 5% of their employees are on Medicaid (the average for other employers is 4 %). And 27% of employee’s kids are on subsidized health programs, while the average is 22 percent. http://www.nytimes.com/packages/pdf/business/26walmart.pdf
Walmart is making money, lot’s of it. And thus, they could easily provide better coverage. For example, in Wisconsin, 1,252 Walmart employees and dependents are on State Medical programs, costing Wisconsin $2.7M per year. In comparison Walmart make a profit of $10.3 Billion dollars in 2004. “Big Companies Fill BadgerCare Rolls,”
One Congressional report estimated that one 200-person Wal-Mart store may result in a cost to federal taxpayers of $420,750 per year – about $2,103 per employee. (“Everyday Low Wages: The Hidden Price We All Pay for Wal-Mart”, February 16, 2004.) <—-likely a bit outdated, but…..
Thus, while Walmart makes zillions, we the taxpayers support their employees. That isn’t an example of good stewardship.
——> With all this being said (written) , I really don’t want to debate Walmart pros and cons. Just don’t have the energy or inclination. Just trying to answer some of the above issues.
What NO ONE has pointed out is that a part-time cashier gig at Walmart is not a career. It’s not designed to be a career. Like every other hierarchy, hard work gets you to full time, where benefits kick in, and wages/responsibility go up, doors are opened. I topped out at 13.65 working at Best Buy before I moved on knowing it was not enough to support myself. But I started at $8/hr. And if these people don’t climb the Walmart ladder, let their bottom rung be a jumping point on to someone elses ladder. The people who don’t want to be successful will stay at 20 hours a week bagging at walmart.
“What NO ONE has pointed out is that a part-time cashier gig at Walmart is not a career. It’s not designed to be a career.”
That’s an excellent point – because for many, jobs like this have become careers. There are few other jobs with better wages for them to move into.
I say again: average real wages (adjusted for inflation) for the entire bottom 90% of the income scale – everyone making about $140K or less today – have not gone up in three decades. Some went up, some went down, but the average within that 90% of us was zero. The only way to grow was to get into that top 10 percent and have a job that gets you $140K a year. For most people who start out at Walmart, that’s never going to happen.
“The people who don’t want to be successful will stay at 20 hours a week bagging at walmart.”
Many of the people who DO want to be successful will also stay at 20 hours a week bagging at Walmart, or an equivalent job, because they have little choice.
NPR news story several days ago noted that the ladder up for young employees – especially service sector doesn’t exist anymore.
@Sansabelt: most welcomed
@JohnFountain As I said, I don’t know what the answer is… obviously we can’t eliminate Amazon or Walmart and go back in a time machine to the 1950s.
With specific regard to Best Buy, they were teetering on the verge of bankruptcy until their management made some fundamental changes to their business model, and recently they have been doing much better. But they are hardly flourishing. They have been closing locations and opening new, much smaller, stores, and relying on their website more and more. The stores are trending towards a place where you pick up merchandise you have ordered online and had delivered to that store. Their earnings and revenue are still falling, year on year.
dezlboy, do you really expect the pro-union “reserach group” The Institute for Research on Labor and Employment to come to any other conclusion than that Walmart is bad in every way possible? They say right on their website, “Since its inception, IRLE has emphasized service to external constituencies, including policy makers, unions and their members.” In other words, this group of UC Berkley professors is the “academic” mouthpiece of the labor unions. They aren’t independent in any way.
dezlboy said: “Walmart is making money, lot’s of it. And thus, they could easily provide better coverage.”
What you are suggesting is that Walmart should provide more compensation to their employees than the market demands just because “it’s the right thing to do.” Therefore, I will once again ask the question which nobody seems willing to answer:
To those who oppose Walmart because you believe their low prices come on the back of employees who should be paid more: When making other purchases, do you similarly go with the high bid because you believe it will result in the employee being paid more?
For example, if you get three quotes to build a fence or to fix a leaky faucet, do you intentionally pick the highest bid to ensure that the employees of get paid more? When you purchase an airline ticket, do you seek a higher priced ticket to help ensure airline employees get paid more? When you buy a car, do you pick the dealer who gives you the highest “out the door price” to help those employees receive the highest sales commission? When you get rate quotes for a refi on your mortgage, do you select the bank with the highest rate?
I ask these questions in all seriousness and would like to hear your answers.
dezlboy, I look forward to your response.
Actually, yes, in a very real way I do tend to pay more to support workers in my community.
Given the choice, I go to the local mom and pop over the corporate chain every time.
Yes, I also consider how a store or business treats its workers sometimes when choosing whether to shop there. But that’s still missing the point. If we didn’t have a low-wage economy, the lowest bid/price wouldn’t be so low, nor would it matter as much to me because I would be paid more too.
The long-term trend of wages growing as businesses grew has been reversed. Instead, most of us are going nowhere, and that’s bad for workers and bad for everyone in the long run.
Rankin – I hate to get too sidetracked on the Best Buy thing but, respectfully, your understanding is not correct. Pre-tax operating income increased from $303 million the first half of 2012 to $552 million in the first half of 2013. They were never near bankruptcy, despite the story that certain media tried to sell. I could go on and on about their $3.5 billion of stockholder’s equity and the maturities of their debt to further prove my point, but its really not relevant to Walmart.
sansabelt – you’ve said multiple times that wages, adjusted for inflation, have not increased in 30 years. In theory, why is it that you believe wages should increase faster than inflation?
sansabelt said: “I also consider how a store or business treats its workers sometimes when choosing whether to shop there.”
That sounds like a no.
rankin said: “Actually, yes, in a very real way I do tend to pay more to support workers in my community. Given the choice, I go to the local mom and pop over the corporate chain every time.”
So let’s say you are going to buy an ice cream cone. You buy it from Toby’s in Westover rather than from Baskin Robbins on Lee Highway, because you want to support the “local mom and pop.” What makes you think that Toby’s pays its workers, the scoopers, more than Baskin Robbins? And why are the scoopers at Toby’s considered by you to be “workers in my community” while the workers at the Baskin Robbins, which happens to be a corporate chain, not considered by you to be “workers in your community”? Don’t both groups of workers work in your community?
@JohnFontain, while wages today might be the “same” as previous years (I am not sure that is true), expenses as food, medical care, etc have risen (?) at a greater rate. Thus wage earners have lost buying power.
“sansabelt – you’ve said multiple times that wages, adjusted for inflation, have not increased in 30 years. In theory, why is it that you believe wages should increase faster than inflation?”
Because that’s how we created the entire middle class and turned our country into what it is. It’s the entire basis of the American Dream.
If we hadn’t done that, we’d still be a nation of a few rich factory owners and millions of poor factory workers living in tiny rented flats. No middle class at all. Now we’re deconstructing the middle class instead.
Think about it on a personal level. Don’t you think that you personally should make more, after inflation, at the end of your career than the beginning? Do you really think that you should be at the same level as when you started? Do you think you should be making the same wages, at the same standard of living, your great grand-parents made? (And everyone should compare their earnings at the beginning of their career to now and adjust for inflation and see how they’re actually doing. Here’s an inflation calculator to help: http://www.bls.gov/data/inflation_calculator.htm).
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