Per Benchmark Reporter:
(http://www.benchmarkreporter.com/wp-content/uploads/2015/03/walmart-300x160.jpg)
According to market analysts, Wal-Mart`s decision to increase the wages of 500,000 staff from April is going to have an ripple effect on many industries and States across America. They said, Wal-Mart`s decision last week to pay at least $9/hour to their staff, which is $1.75 above federal payment have already have an impact in other industry.
According to market experts retailers are finding it hard to retain and find good entry level staff from April. In a statement last week Wal-Mart CEO Doug McMillon said, "These are strategic investments in our people to reignite the sense of ownership they have in our stores. As a result, we firmly believe customers will benefit from a better store experience which can drive higher sales and returns for shareholders over time".
In recent times Wal-Mart had struggled to retain and hire new staff, after another retail giant GAP increase their minimum wages to $9/hr last year. They also promised to increase it to $10/hr in 2015. After Wal-Mart`s decision last week Wal-Mart now have the one of the highest staff turnover level in USA.
Wal-Mart`s decision on pay hike is now one of the major talking points among other retail giants. In a recent interview with a local Media TJX, owner of budget chain TJ Maxx (TK Maxx in U.K.) pledge to increase their minimum wage level. They said, they will increase the hourly pay to $9 in June and $10 from 2016. TJ Maxx CEO Carol Meyrowitz said: "This pay initiative is an important part of our strategies to continue attracting and retaining the best talent to deliver a great shopping experience for our customers, remain competitive on wages in our US markets and stay focused on our value mission".
Another discount retailer Dollar Tree (DLTR) said, they have no intention of following Wal-Mart. When asked about the pay hike their CEO Bob Sasser said, "We watch the industry trends carefully, and of course, we're compliant with all the state and federal regulations. But I'll tell you, outside of complying with the continued changes in the regulations, we've made no plans for a sweeping change to our minimum wage rates. But we will continue to pay competitive wages, market by market, just as we always have done based on the prevailing rates".
Wal-Mart`s decision also have an effect on some States, Andrew Cuomo, Governor of New York State, said all waiting staff and other staffs whose wages are supplemented by tips, will have a pay rise. He also confirmed that, by the end of this year he wants to make their minimum wage $7.5/hr. Chicago also increasing the minimum wages from $8.25 to $10 an hour from July and $13 from 2019. According to Federal law the minimum wages across USA is $7.25 since 2009. Barack Obama want Congress to increase it into $10.10/hr.
With Walmart employees costing taxpayers over $6B/year in government assistance, this is only a good thing. Especially as someone who does not shop there.
Other retailers will follow
So the market works without government intervention, who knew!
amazing
How the pie is sliced depends upon more than economic forces:
Walmart's Visible Hand, by Paul Krugman, Commentary, NY Times:
A few days ago Walmart, America's largest employer, announced that it will raise wages for half a million workers. For many of those workers the gains will be small, but the announcement is nonetheless a very big deal, for two reasons. First, there will be spillovers: Walmart is so big that its action will probably lead to raises for millions of workers employed by other companies. Second, and arguably far more important, is what Walmart's move tells us — namely, that low wages are a political choice, and we can and should choose differently.
Some background: Conservatives — with the backing, I have to admit, of many economists — normally argue that the market for labor is like the market for anything else. The law of supply and demand, they say, determines the level of wages, and the invisible hand of the market will punish anyone who tries to defy this law.
Specifically,... a minimum wage, it's claimed, will reduce employment and create a labor surplus... Pressuring employers to pay more, or encouraging workers to organize into unions, will have the same effect.
But labor economists have long questioned this view..., workers are people, wages are not, in fact, like the price of butter, and how much workers are paid depends as much on social forces and political power as it does on simple supply and demand. ...
Walmart is ready to raise wages.... And its justification for the move echoes what critics of its low-wage policy have been saying for years: Paying workers better will lead to reduced turnover, better morale and higher productivity.
What this means, in turn, is that engineering a significant pay raise for tens of millions of Americans would almost surely be much easier than conventional wisdom suggests. Raise minimum wages by a substantial amount; make it easier for workers to organize, increasing their bargaining power; direct monetary and fiscal policy toward full employment, as opposed to keeping the economy depressed out of fear that we'll suddenly turn into Weimar Germany. It's not a hard list to implement — and if we did these things we could make major strides back toward the kind of society most of us want to live in.
Target is following suit with pay increases. I guess that these 'trendsetting 800lbs gorillas' of the world set the tone ala Universal piggybacking Disney with admission increases, or whatever the hell.
http://www.cnbc.com/id/102508233?__source=xfinity
Quote from: finehoe on March 02, 2015, 01:17:41 PM
But labor economists have long questioned this view..., workers are people, wages are not, in fact, like the price of butter, and how much workers are paid depends as much on social forces and political power as it does on simple supply and demand. ...
Walmart is ready to raise wages.... And its justification for the move echoes what critics of its low-wage policy have been saying for years: Paying workers better will lead to reduced turnover, better morale and higher productivity.
What this means, in turn, is that engineering a significant pay raise for tens of millions of Americans would almost surely be much easier than conventional wisdom suggests. Raise minimum wages by a substantial amount; make it easier for workers to organize, increasing their bargaining power; direct monetary and fiscal policy toward full employment, as opposed to keeping the economy depressed out of fear that we'll suddenly turn into Weimar Germany. It's not a hard list to implement — and if we did these things we could make major strides back toward the kind of society most of us want to live in.
Perhaps not Weimar Germany but definitely France.
If people truly believe that Walmart succombed solely to social or political pressures to raise their wages, then many people underestimate their capacity to analyze their situation.
You can bet that Walmart ran the needed forecasting models to see how a wage increase would play out across all the areas noted in the NYT article. If those models showed that they would lose money or it would constrain needed profit for capital investment, you would have seen a PR and lobbying campaign like no other.
Clearly they calculated what products they would have to raise prices on, what products they would stop carrying, or what suppliers would have to change to support the increase in pay.
In summary, social and political pressures may have triggered the analysis, but if they couldnt make it work, I am pretty sure it wouldnt have happened.
Quote from: spuwho on March 19, 2015, 12:03:36 PM
If those models showed that they would lose money or it would constrain needed profit for capital investment...
Clearly they calculated what products they would have to raise prices on, what products they would stop carrying, or what suppliers would have to change to support the increase in pay.
Or perhaps they calculated that out of the $129.74 billion profit they made in 2014, they could afford to distribute a few pennies less to the Walton family.
Quote from: finehoe on March 19, 2015, 03:42:25 PM
Quote from: spuwho on March 19, 2015, 12:03:36 PM
If those models showed that they would lose money or it would constrain needed profit for capital investment...
Clearly they calculated what products they would have to raise prices on, what products they would stop carrying, or what suppliers would have to change to support the increase in pay.
Or perhaps they calculated that out of the $129.74 billion profit they made in 2014, they could afford to distribute a few pennies less to the Walton family.
How about the taking the simple route and analyzing the spending habits of their own employees?
I you come to the realization that a good portion of your employee's paychecks go back into the company, wouldn't it make more sense to increase those paychecks? It gives the appearance of goodwill while increasing gross sales and assuredly, the net margins.
The simple reason for this wage increase is that with the economy slowly improving, the pay/benefits they were offering were no longer competitive to attract the workers they need to satisfy their customers. With apologies to Mr. Krugman, labor is worth whatever someone is willing to pay for it and the price just went up.
Quote from: urbanlibertarian on March 20, 2015, 11:24:55 AM
labor is worth whatever someone is willing to pay for it
Unless it's tech workers, and then they claim its only about skills.
Employers compete with each other for workers with the right skills and workers compete with each other for jobs they have the skills for. Supply and demand affects both what employers pay and what workers accept.
"It is not, however, difficult to foresee which of the two parties must, upon all ordinary occasions, have the advantage in the dispute, and force the other into a compliance with their terms. The masters, being fewer in number, can combine much more easily; and the law, besides, authorizes, or at least does not prohibit their combinations, while it prohibits those of the workmen. We have no acts of parliament against combining to lower the price of work; but many against combining to raise it. In all such disputes the masters can hold out much longer. A landlord, a farmer, a master manufacturer, a merchant, though they did not employ a single workman, could generally live a year or two upon the stocks which they have already acquired. Many workmen could not subsist a week, few could subsist a month, and scarce any a year without employment. In the long run the workman may be as necessary to his master as his master is to him; but the necessity is not so immediate." - Adam Smith
Quote from: coredumped on March 01, 2015, 05:43:29 PM
So the market works without government intervention, who knew!
The implications of this comment are somewhat ironic given the fact that WalMart is the largest recipient of SNAP benefits.
Here us a great article in Forbes
http://www.forbes.com/sites/clareoconnor/2014/04/15/report-walmart-workers-cost-taxpayers-6-2-billion-in-public-assistance/
QuoteWalmart's low-wage workers cost U.S. taxpayers an estimated $6.2 billion in public assistance including food stamps, Medicaid and subsidized housing, according to a report published to coincide with Tax Day, April 15.
Quote from: JC on March 22, 2015, 09:45:03 AM
Quote from: coredumped on March 01, 2015, 05:43:29 PM
So the market works without government intervention, who knew!
The implications of this comment are somewhat ironic given the fact that WalMart is the largest recipient of SNAP benefits.
Here us a great article in Forbes
http://www.forbes.com/sites/clareoconnor/2014/04/15/report-walmart-workers-cost-taxpayers-6-2-billion-in-public-assistance/
QuoteWalmart's low-wage workers cost U.S. taxpayers an estimated $6.2 billion in public assistance including food stamps, Medicaid and subsidized housing, according to a report published to coincide with Tax Day, April 15.
That's a pretty loaded assumption. This whole "living wage" idea is complete bs. It's not up to Walmart - or any other company for that matter - to pay someone "enough" to live off of. It's up to any company with employees to pay their employees what the employer thinks they are worth. If you think you are worth more than what someone is willing to pay you, then find another job that better suits your pay requirements or become self employed where you truly find what exactly your worth. Wal Mart raised their own minimum wage because A) high employee turnover costs money and B) raising wages to the newer amount would still keep their margins at a level which makes sense and allow them to continue selling their products at prices demanded by the customers. So at the end of the day, it isn't Wal Mart's wages that are costing taxpayers. It's the fact that we still have 30-60 year olds working jobs meant for any 15 year old with a pulse.
Take away the assistance, take away the employees subsidies, take away SNAP and you have a very different walmart.
You are also forgetting collective bargaining. The employees of walmart should form a union and strike, so yeah, I agree with you a little...
and
QuoteMade in the U.S.A?
Despite a well-publicized "Made in the U.S.A." campaign, 85 percent of the stores' items are made overseas, often in Third World sweatshops. In fact, only after Wal-Mart's "Buy American" ad campaign was in full swing did the company become the country's largest importer of Chinese goods in any industry. By taking its orders abroad, Wal-Mart has forced many U.S. manufacturers out of business. The chain was broadly criticized for being the primary distributor of many goods attracting controversy, including Kathie Lee Gifford's clothing line, Disney's Haitian-made pajamas, child-produced clothing from Bangladesh and sweatshop-produced toys and sports gear from Asia. Difficult working conditions also exist in the United States: In 1991, labor inspectors found labels for Wal-Mart brands being made in Manhattan's Chinatown. There, 16 and 17 year-old Chinese immigrants without permits had been working for one month without being paid.
http://www.pbs.org/itvs/storewars/stores3.html
Where are those 30 to 60 year olds supposed to work, in manufacturing jobs in China?
Quote from: JC on March 22, 2015, 06:33:50 PM
Take away the assistance, take away the employees subsidies, take away SNAP and you have a very different walmart.
You are also forgetting collective bargaining. The employees of walmart should form a union and strike, so yeah, I agree with you a little...
and
QuoteMade in the U.S.A?
Despite a well-publicized "Made in the U.S.A." campaign, 85 percent of the stores' items are made overseas, often in Third World sweatshops. In fact, only after Wal-Mart's "Buy American" ad campaign was in full swing did the company become the country's largest importer of Chinese goods in any industry. By taking its orders abroad, Wal-Mart has forced many U.S. manufacturers out of business. The chain was broadly criticized for being the primary distributor of many goods attracting controversy, including Kathie Lee Gifford's clothing line, Disney's Haitian-made pajamas, child-produced clothing from Bangladesh and sweatshop-produced toys and sports gear from Asia. Difficult working conditions also exist in the United States: In 1991, labor inspectors found labels for Wal-Mart brands being made in Manhattan's Chinatown. There, 16 and 17 year-old Chinese immigrants without permits had been working for one month without being paid.
http://www.pbs.org/itvs/storewars/stores3.html
Where are those 30 to 60 year olds supposed to work, in manufacturing jobs in China?
Like I said, if those people feel like they aren't getting paid for what they bring to the table, then find something else or work for yourself. If you have to move, then move. If you have a family, you do what you have to do to provide for them. But simply whining about low pay will get you a whole lot of nowhere.
As far as collective bargaining goes, that is something which would entirely wipe out Wal Mart's business model - which is low cost of doing business allowing products to be on the shelf at low prices. This is what you might consider the big Catch 22. As the Forbes article tries to paint Wal Mart as the biggest reason for subsidies due to low wages - where will the same low wage shoppers go if Wal Mart can't offer Wal Mart prices anymore? If Wal Mart becomes unionized, then the biggest cost to any company - its employees - will undoubtedly go WAY up. If margins get squeezed because the cost of employing someone has greatly increased, the only thing left to do is pass that increase along to the consumer.
Quote from: WarDamJagFan on March 22, 2015, 08:11:35 PM
Quote from: JC on March 22, 2015, 06:33:50 PM
Take away the assistance, take away the employees subsidies, take away SNAP and you have a very different walmart.
You are also forgetting collective bargaining. The employees of walmart should form a union and strike, so yeah, I agree with you a little...
and
QuoteMade in the U.S.A?
Despite a well-publicized "Made in the U.S.A." campaign, 85 percent of the stores' items are made overseas, often in Third World sweatshops. In fact, only after Wal-Mart's "Buy American" ad campaign was in full swing did the company become the country's largest importer of Chinese goods in any industry. By taking its orders abroad, Wal-Mart has forced many U.S. manufacturers out of business. The chain was broadly criticized for being the primary distributor of many goods attracting controversy, including Kathie Lee Gifford's clothing line, Disney's Haitian-made pajamas, child-produced clothing from Bangladesh and sweatshop-produced toys and sports gear from Asia. Difficult working conditions also exist in the United States: In 1991, labor inspectors found labels for Wal-Mart brands being made in Manhattan's Chinatown. There, 16 and 17 year-old Chinese immigrants without permits had been working for one month without being paid.
http://www.pbs.org/itvs/storewars/stores3.html
Where are those 30 to 60 year olds supposed to work, in manufacturing jobs in China?
Like I said, if those people feel like they aren't getting paid for what they bring to the table, then find something else or work for yourself. If you have to move, then move. If you have a family, you do what you have to do to provide for them. But simply whining about low pay will get you a whole lot of nowhere.
As far as collective bargaining goes, that is something which would entirely wipe out Wal Mart's business model - which is low cost of doing business allowing products to be on the shelf at low prices. This is what you might consider the big Catch 22. As the Forbes article tries to paint Wal Mart as the biggest reason for subsidies due to low wages - where will the same low wage shoppers go if Wal Mart can't offer Wal Mart prices anymore? If Wal Mart becomes unionized, then the biggest cost to any company - its employees - will undoubtedly go WAY up. If margins get squeezed because the cost of employing someone has greatly increased, the only thing left to do is pass that increase along to the consumer.
The facts are out there, WalMart has hurt the US economy.
QuoteIn 2006, the big-box retailer promised to bring jobs to the cash-strapped community. But according to a landmark study by Loyola University, the company's rhetoric didn't match reality: Within two years of Walmart's opening its doors, 82 local stores went out of business.
Instead of growing Chicago's retail economy, Walmart simply overtook it - absorbing sales from other city stores, and shuttering dozens of them in the process.
Researchers at Loyola dubbed Walmart's store a wash - generating no new sales revenue for Chicago, and no new jobs for hard-off residents.
Chicago's cautionary tale isn't isolated. Countless communities, and peer-reviewed surveys across the country, all reach the same conclusion: When Walmart moves in, small businesses, and jobs, move out; Main St. dies.
According to a provisional study by David Neumark, Junfu Zhang and Stephen Ciccarella called "The Effects of Walmart on Local Labor Markets," for every two jobs Walmart "creates," three local jobs are destroyed.
With due respect to Walmart, this is not the kind of economic development neighborhood small businesses need.
http://www.nydailynews.com/new-york/brooklyn/study-proves-walmart-super-stores-kill-local-small-businesses-article-1.140129
Your arguments about collective bargaining have been used for a long time. What has organized labor done? Oh I dont know... The 8 hour work day... Higher wages... Safer working conditions... Better benefits... Pensions...
All I am saying is do a little homework, the information is out there.
Quote from: stephendare on March 22, 2015, 08:54:30 PM
you really drank all the kool aid didn't you, wardamjagfan. Do you believe in Elite Santa Claus and Ayn Rand Jesus as well? Coz they are totes real.....
:)
My old home town. Pop. 8200.
WalMart arrives in 1992 on the outskirts of town. By 1996, downtown is dead.
In 2000 they now leave as the anchor in the towns only strip mall and build a stand alone center a mile north.
The strip mall is now effectively dead as all the associated retail died.
The only reason the town likes it is that it imports tax revenue. Meaning people drive from farther away to shop there who wouldnt normally come.
^^^What city?
I found a really interesting article online about WalMart and its negative economic impact on cities, specifically Asheville, NC. An interesting read that seems to fit perfectly with what is going on in Jacksonville and many other cities across the country.
http://www.salon.com/2013/11/10/walmart_an_economic_cancer_on_our_cities/ (http://www.salon.com/2013/11/10/walmart_an_economic_cancer_on_our_cities/)
Quote from: I-10east on March 23, 2015, 06:13:54 PM
^^^What city?
Pretty much any small/medium sized town they go into...this is the natural result of their business model.
Starke is a good example of this.
As the dominoes fall......
Per Reuters:
McDonald's raising average worker wage to about $10 an hour
(Reuters) - McDonald's Corp (MCD.N) plans to raise the average pay of about 90,000 U.S. workers to around $10 an hour, but the increase will not benefit workers at the vast majority of the restaurants, because they are operated by franchisees, who make their own wage decisions.
Workers groups said the move by McDonald's, which is also adding benefits such as paid vacations, fell short of their goals. They planned a nationwide protest for Thursday. Wal-Mart Stores Inc (WMT.N) and other retailers have introduced entry-level wage hikes in response to frequent worker protests calling for higher pay and better conditions.
McDonald's, which announced the increases on Wednesday, has been fighting weak traffic and slumping sales in the United States.
The pay increase, for workers at roughly 1,500 company-owned U.S. restaurants, will take effect on July 1.
Starting wages at the restaurants will move to $1 above the locally mandated minimum wage. The increase will take the average hourly rate for those workers to $9.90 on July 1, up from $9.01 currently, McDonald's said.
By the end of 2016, McDonald's said, the average hourly wage rate for McDonald's employees at those restaurants will exceed $10.
Almost 90 percent of McDonald's more than 14,000 U.S. restaurants are operated by franchisees, who set pay and benefits for their own workers. But the expectation is they will face pressure to follow suit to stay competitive as employers.
McDonald's also said that full- and part-time crew employees at company-operated restaurants, with at least one year of service, will begin to accrue personal paid time-off. Workers said the company does not currently offer paid time-off.
Beyond that, some employees at both company- and franchise-run stores will be eligible for education assistance.
"We know that a motivated workforce leads to better customer service, so we believe this initial step not only benefits our employees, it will improve the McDonald's restaurant experience," Steve Easterbrook, who became McDonald's chief executive on March 1, said in a statement.
The wage move quickly drew criticism.
"This is too little to make a real difference, and covers only a fraction of workers," Kwanza Brooks, a McDonald's worker from Charlotte, North Carolina, who earns $7.25 per hour, said in a statement.
Brooks is part of the union-supported "Fight for $15" movement, which is calling on employers to more than double wages above the federal minimum wage of $7.25. The group plans a nationwide protest at McDonald's restaurants on Thursday.
Shares of McDonald's, whose annual profit and revenue fell last year, were essentially flat at $96.29 in extended trading.
The wage increase at McDonald's company-run restaurants could force franchisees to follow. In turn, that could cause those franchisees to raise food prices to cover higher labour costs.
That could benefit McDonald's because it collects royalties from franchisees based on sales. But, it also could squeeze franchisee profits and threaten the company's Dollar Menu, which is popular with the chain's core base of lower-income diners.
Bigger sales from price increases means more revenue to McDonald's Corp, which could solve some of the company's problems and make Easterbrook look like he is fixing things, said Richard Adams, a former McDonald's franchisee who now consults for current ones.
"They'll try to paint this as altruistic," said Adams. "It's not as nice as it sounds."
The Urban Neighborhood Wal-Mart: A Blessing Or A Curse?
http://www.npr.org/2015/04/01/396757476/the-neighborhood-wal-mart-a-blessing-or-a-curse
Quote from: finehoe on April 02, 2015, 08:29:24 AM
The Urban Neighborhood Wal-Mart: A Blessing Or A Curse?
http://www.npr.org/2015/04/01/396757476/the-neighborhood-wal-mart-a-blessing-or-a-curse
Great article! Thanks for posting.
Wal-Mart reports that its recent wage hike is paying off via reduced turnover, which produces cost savings that offset the direct expense of the higher wages.
http://thinkprogress.org/economy/2015/06/09/3667927/walmart-turnover/