Why Walmart CAN afford to pay workers a $15 minimum wage

Discussion in 'Off-Topic Discussions' started by Abner, Jun 4, 2016.

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  1. Abner

    Abner Well-Known Member

    https://www.yahoo.com/finance/news/why-walmart-stop-fighting-15-125300414.html

    "Low wages matter for taxpayers, too. When workers cannot afford to meet their basic needs despite working full time, they are forced to turn to public assistance. This means that companies rely on taxpayer dollars to subsidize rock-bottom wages. A single adult with one child who works full-time for $10 an hour will still qualify for the Supplemental Nutrition Assistance Programand the Earned Income Tax Credit, for example."

    "Wal-Mart's chief financial officer noted in the company's 2016 annual report that Wal-Mart's investment in wages was "not only the right thing to do for [its] associates, but it positions [Wal-Mart] to be a stronger company going forward."
     
  2. Maniac Craniac

    Maniac Craniac Moderator Staff Member

    Employers pay employees for the work that they do, not for how much money the employees need to make a living. Essentially, you are selling your labor. In theory (yes, only in theory) this means that one's labor and one's pay are of commensurate value. How many Wal-Mart jobs are really worth $15/hr + benefits?

    "This means that companies rely on taxpayer dollars to subsidize rock-bottom wages."

    Or, maybe it's the other way around? If Wal-Mart really is so bad and unfair (yes that's an if, but we'll run with it here), then I'd think it safe to assume (correct me if I'm missing something here) that the employees would only be willing to work at Wal-Mart because it is their last hope for having any kind of job at all. In that case, Wal-Mart would actually be SAVING taxpayer dollars since the scores of desperate employees would have no other options for work otherwise and would therefore need MORE assistance. I speak somewhat from personal experience here. I've never worked at Wal-Mart, but I did apply to work there once while desperately hoping that I'd be hired. As much as I might have hated working there, it would have been a huge step up from the breadcrumbs I was receiving from Unemployment Insurance benefits, and it would have allowed me to pay into the pool instead of taking out of it. Thankfully, I got hired somewhere else before I really, really got desperate, but that's tangential to the story.

    Dunno what to make of the fact that, for the first time in my entire life, I'm actually defending Wal-Mart on something. Putting my arguments above aside and stepping into the realm of my personal feelings, I would prefer that Wal-Mart pay its employees better. The flip side of that is that they should be more selective of whom they hire. Pay them all $15/hr. YES! Do it! But in doing that, only hire and keep people who prove themselves worthy of earning that money. Make them feel like they belong, that their contribution matters and that they can and should be proud of their jobs. It would certainly make shopping at Wal-Mart a more pleasant experience and may be a great investment for them in the long run:)

    However, let the distinction here be clear. There is a HUGE difference between Wal-Mart willingly changing their policies- whether out of the kindness of their hearts, or because they are greedy bastards think it will be good for business (such as caving in to public pressure, giving in to the collective demands of its employees, as a superficial act of good will with the intent of boosting marketing and sales, etc)- and the much different situation where they are forced to do so by law. I guess from there, you can infer your own segue into economic arguments about wage laws and ethical arguments about the rights of business owners. I've already made this much more complicated than I intended for it to so... yeah, uh... I'm done.
     
  3. sanantone

    sanantone Well-Known Member

    Wal-Mart has also put a lot of smaller companies out of business, so that could be one reason why so many people are looking to apply there.
     
  4. Rich Douglas

    Rich Douglas Well-Known Member

    In a perfect labor market, you'd only need a minimum wage to ensure a minimal standard of living. But the labor market has never been perfect.

    After the Great Depression and WWII, this country entered a stage where the labor reforms of the 1930s could really take hold. Between those changes and the robust post-war economy, the middle class thrived like never before. But since the Reagan era, we've seen an onslaught against labor unions, which also affected non-labor jobs. The middle class is disappearing. Additionally, this is putting even more pressure on the lower class as wages everywhere get depressed. But the economy is as productive as ever, so who's getting those benefits? The richest among us.

    The minimum wage is one way to move some of that wealth from the owners to the workers. Other ways include the estate tax, capital gains tax (when it's sufficiently high), collective bargaining, and a progressive income tax.

    Without these provisions being protected and used, we could very well return to the 1890s-style era of the robber barons. (A mitigating force is the much larger--in proportion--civil service and career military service.) Unbridled capitalism brings that, along with a destruction of the ecology along the way.

    We're heading to a time when there will be a huge accumulation of wealth at the top, a huge lower class, and a small middle class made up of professionals, civil servants, military, and the mercantile class. Capitalism constrained by a democracy can mitigate this, of course. It all depends on what the American people want.
     
  5. LearningAddict

    LearningAddict Well-Known Member

    I just want to know what will happen to all wages after the minimum wage is increased to $15. How do you balance this?
     
  6. AV8R

    AV8R Active Member

    It really isn't that simple. It would be nice if it was. Minimum wage laws are job killers. When you force an employer to pay employees more than they are worth, employers start cutting back and eliminating positions. Minimum wage laws are the reason some low-skill jobs have disappeared over the years. When was the last time you had a gas station attendant pump your gas? When was the last time there was a dedicated grocery bagger in your check out line? Wendy's, for example, just announced that it is setting up 6,000 order kiosks in its restaurants across the nation as a direct result of the increasing minimum wage.

    Wendy's Serves Up Kiosks As Wages Rise, Hits Fast-Food Group | Stock News & Stock Market Analysis - IBD

    Most low-wage jobs are entry-level jobs that young people move up out of, after acquiring work experience and a track record that makes them eligible for better jobs. But you can't move up the ladder if you can't get on the ladder. This is the reality we will face is $15 an hour is mandated across the nation. We will have a nation of perpetually unemployed youth.

    Back in 1948, when inflation had rendered meaningless the minimum wage established a decade earlier, the unemployment rate among 16-17-year-old black males was under 10 percent. But after the minimum wage was raised repeatedly to keep up with inflation, the unemployment rate for black males that age was never under 30 percent for more than 20 consecutive years, from 1971 through 1994. In many of those years, the unemployment rate for black youngsters that age exceeded 40 percent and, for a couple of years, it exceeded 50 percent.

    The assumption of $15 minimum wage proponents is that all corporations are greedy and are sitting on a mountain of cash. They assume that higher minimum wages are necessary to force these companies to part with some of their greedy holdings so those at the bottom can earn more. This isn't always the case. There are many industries that operate on very thin margins. The average margin for your local grocery store, for example, is only about one percent. For every $100 that someone spends at a grocery store, the store earns $1. That's it. Restaurants also operate on very thin margins.

    Uber-brilliant economists, Walter Williams and Thomas Sowell, do an excellent job of explaining why minimum wage laws actually cause more harm than good in their aptly named video: "Minimum Wage, Maximum Folly."

    https://www.youtube.com/watch?v=b4Ubp7U9Dq4
     
  7. Rich Douglas

    Rich Douglas Well-Known Member

    Except that, historically, this hasn't been the case. Increases in the minimum wage have had little-to-no effect on employment.

    The minimum wage moves wealth from owners to workers. Sure, lots of people are against it. But it's true.
     
  8. cookderosa

    cookderosa Resident Chef


    Creating a mandated minimum wage has morphed into an ugly animal. Frankly, it's obnoxious for people to demand a higher minimum wage. Here's a thought- open your own business.
     
  9. LearningAddict

    LearningAddict Well-Known Member

    But in the past those increases were more gradual. A $7+ jump in the short amount of time many are proposing is a different situation. With companies already gearing up for automated systems, this is going to backfire on the workers fighting for it. Fewer jobs due to increased automation, more competition for non-automated jobs, and a higher level of skilled worker than the average minimum wage worker in those jobs; all of those things are what I foresee.

    On the bright side, having had some recent issues with 7-11 and terrible customer service from their minimum wage workers, I would welcome more competent and better skilled workers that competition would bring.
     
  10. Rich Douglas

    Rich Douglas Well-Known Member

    I agree that a big leap like this might be disturbing. But most schemes are around a gradual increase spread over several years, not an overnight leap to $15. I also think the minimum wage should be indexed to cost-of-living by region and/or locality. (Like federal civil service pay or military housing allowances.) I don't think what works for NYC or LA works for Huntsville, Alabama.

    We need a national human resource development strategy. Only when barriers to success have been lowered and pathways have been defined and opened will I even consider the Ayn Rand attitudes displayed on this board. The game is rigged and the field tilted against the average worker, and it's gotten much worse over the past two decades. This isn't a political opinion--IMHO, it's one of the few times I agree that "both sides do it." They do. But if we don't change this, the villagers are going to come with pitchforks and torches, and they're going to knock down the castle. (Or, more likely, the government will do it for them as was the case in the 1930s.)

    For those who think they're against socialism, please know that the abusive and unrestrained application of capitalism is what gives the support for socialism its boost. Capitalism works best with restraints and a safety net. We have decades of data that show us this.
     
  11. AV8R

    AV8R Active Member

    Factually incorrect, Rich. You're entitled to your own opinions all day long, but not your own set of facts. I'm guessing you didn't even watch the video I linked to by two highly respected PhD economists on the minimum wage. These guys know what they are talking about when it comes to the minimum wage.
     
  12. AV8R

    AV8R Active Member

    Minimum Wage Laws Kill Jobs | Cato @ Liberty

     
  13. AV8R

    AV8R Active Member

    Also worth noting is that minimum wage laws around the world (and certainly in the U.S. too) were originally conceived in racism. It had nothing to do with "helping" poor people earn more money. These laws were passed to prevent the hiring of minorities who would do the same work for less money.

    African-American economist Thomas Sowell with Stanford University’s Hoover Institution gives an uncomfortable historical primer behind minimum wage laws:

    Forbes Welcome

    Articles: The Minimum Wage is a Racist Law
     
  14. Rich Douglas

    Rich Douglas Well-Known Member

    You're wrong and you're stupid to attack me. I'm not going to stand for it, you anonymous clown. The U.S. Government says you're wrong. Get a clue: https://www.dol.gov/featured/minimum-wage/mythbuster
     
    Last edited by a moderator: Jun 5, 2016
  15. Ted Heiks

    Ted Heiks Moderator and Distinguished Senior Member

    I wonder how many people will be operating the cash registers at WalMart if there were a $15/hour minimum wage.
     
  16. Johann

    Johann Well-Known Member

    Thomas Sowell: "In South Africa during the era of apartheid, white labor unions urged that a minimum-wage law be applied to all races, to keep black workers from taking jobs away from white unionized workers by working for less than the union pay scale.”

    OK. Maybe the whites (some of them) urged change, but I'm guessing it took a long, long time. For years and years, there was a hell of a difference - countenanced and reinforced by law. Back in the day, white mine-workers were getting around $1,200 a month, while black miners were getting $275 or thereabouts.

    J
     
  17. AV8R

    AV8R Active Member

    Take a deep breath, Rich. I think you need it.

    I'm not attacking you. I am merely pointing out that there is very little evidence to support what you are proclaiming as fact.

    I just quoted highly revered PhD economists, a Nobel economist, and provided various other stats, and you still -- STILL -- refuse to accept that raising the minimum wage might not be a good idea, that it might force some people out of the job market. What are we to make of this? As we say in the south, "bless your heart."

    Well, if the U.S. Government proclaims it, then it most certainly must be true. This is the same government that told me if I liked my plan, I could keep my plan. If I liked my doctor, I could keep my doctor. I am now going on year five of not having health insurance because of the lies that were told to pass Obamacare. I never had to go more than a week without health insurance before this debacle. I am self-employed and don't have an employer to provide healthcare for me. Health insurance is now more expensive than ever because of that ill-conceived law. I could make a mortgage payment for what I would have to pay for it now as a self-employed individual. All thanks to the oh-so-trustworthy government.

    That DOL thing you linked to is essentially meaningless. Each administration can establish its own policies and then publish whatever it wants to defend those policies. The DOL is not nonpartisan.

    I'm sorry, but I just don't have the same faith in government as you do.
     
  18. Rich Douglas

    Rich Douglas Well-Known Member

    You're not just stupid, you're a jerk. You decry the difference between opinion and fact, and then offer up opinion pieces as fact. How stupid are you? And when you don't like the facts, you just dismiss the source, as if the facts were somehow in dispute. Your critical thinking skills are awful.

    Go get your tinfoil hat re-lined so you can hear the next dog whistles. Or you can decide not to live in a fact-free bubble. Your call. But don't you dare call me out personally. I'm not going to stand for it. Now buzz off, you twerp.
     
  19. Steve Levicoff

    Steve Levicoff Well-Known Member

    We all know that Rich likes to engage in meaningless pissing contests (which some of us are normally happy to accommodate), but this is the most incendiary message I've ever seen him write. It almost makes me wonder if someone else hijacked his DI account. But that, of course, is just a rhetorical thought.

    Perhaps we're just seeing the onset of Alzheimer's here.
     
  20. Rich Douglas

    Rich Douglas Well-Known Member

    C'mon, Steve. Do something relevant to this century, huh? This has nothing to do with you, you have nothing to contribute, and you're a jackass in a supreme way. You've always been. You haven't done a thing regarding this field in 20 years, yet you pop in occasionally to bloviate like this. You're just a hateful jerk who's lost his way--a very long time ago. Please let us know when you contribute something, huh?
     
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