TCS Daily

Wal-Mart and Toddler Economics

By Tim Worstall - August 29, 2006 12:00 AM

Further to hackney a hackneyed word of the blogosphere, there seems to be something of a 'kerfluffle' over WalMart whirling through the commentariat -- a minor storm making the waves a little choppier than they normally are.

Sebastian Mallaby in the Washington Post and a more academic piece in the Washington Times wonder just what it is that progressives (or as I prefer to call Democrats: reactionaries) have against a company that reduces costs for, and thus boosts the real incomes of, 149 million shoppers, predominantly from the poor and middle classes.

National Review's Jonah Goldberg notes how cross The American Prospect's Ezra Klein was with his recent Los Angeles Times piece and, as is his right, makes fun of him. However, I do so hate to be contrary but I think Ezra is actually correct in this matter. As he says:

"I'm of the opinion that how to handle WalMart is among the two or three most important issues facing the country."

He's right you know. Whether we handle WalMart and the attendant issues as intelligent adults, capable of reasoning, or we do so as whining three-year-olds with all the attendant knowledge of incentives, utopian wishes and economic consequences such a three-year-old might possess is, indeed, one of the important questions facing the country.

At the heart of Klein's cluster of concerns is an entirely valid, even admirable, concern. He wishes the low paid to be paid more and to have better benefits to go with that higher pay. However, like a three-year-old, he's not quite capable of seeing what the consequences of such a wish would actually be. As he says:

"But in case you are interested, it goes something like this: Wal-Mart pays wages barely above the minimum and significantly below the average large retailer. Compared to Costco, or Target, Wal-Mart's salaries, benefits, and worker relations are atrocious. The question is not "Wal-Mart, yes or no?" but whether Wal-Mart can do better on all these metrics. Obviously, they can."

I'll give him an easy pass on Target as they don't in fact pay much better than WalMart. But let's look at Costco shall we? They do indeed pay much better ($17 an hour on average if memory serves me right, as against $9.60 at WalMart) and do indeed provide better ancillary benefits. So on Planet Liberal all we have to do is force (whether by fiat or shaming) WalMart into paying the higher wages because: look, see, we can see from the example of Costco that it's possible!

Indeed, it is possible. But what's getting missed is that little something that we in the real reality-based community have been trying to point out to the minimum and living wage fanatics for decades. When the price of something is raised people use or buy less of it. Now, we've been told endlessly that this isn't true, that raising the minimum wage won't mean job losses, or reductions in hours on offer, that companies will simply use their labor force "more efficiently". Which is exactly what we've been saying. Increased efficiency means using less labor to reach a certain goal. As the price of labor rises, companies will use less of it, as, again, we've all been trying to beat into the dulled synapses of the progressives like Klein.

The proof of this contention? The difference between WalMart and Costco in how much they pay their workers and how many workers they use. Costco does pay more; it also uses about one quarter of the number of employees.

Worth having a look at the two annual reports, don't you think? WalMart and Costco -- there you go -- audited 2005 accounts. Now, I'm playing a few minor games with these numbers: I'm not adjusting for certain subsidaries, minority interests and so on, I'm rounding numbers etc, but these only make minor differences to the overall picture:

Costco has sales of $51 billion, 110,000 employees (45% part time, similar to WalMart isn't it?) and WalMart has sales (in North America) of $191 billion and 1.3 million associates. So Costco has sales of some $465,000 per employee and WalMart $147,000 per employee. That sounds about right to me, it's been a number of years since I lived in the US but Costco is the place where you drag that 50lb bag of rice to the door yourself, right? WalMart is the one where cheery souls are employed solely to bid you good day as you enter? So, in theory, we could in fact get WalMart to pay the same as Costco by making similarly efficient use of labor: that is, firing between two thirds and three quarters of their staff.

You might note that despite having nearly four times more employees WalMart does not pay them one quarter of the amount: this is because a higher portion of turnover is actually devoted to paying said wages. Operating costs are not exactly the same as wages (and the two companies account for them slightly differently, as a note to the WalMart accounts -- too boring even for me to cut and paste -- states) but wages are contained within that number: 10% of turnover for Costco and 17% for WalMart. By this measure WalMart should, in order to be like Costco (as Klein would like), actually be reducing the wages on offer.

We could even look at the profit made per employee: $9,000 at Costco, $7,700 at WalMart. If we were of a Marxist cast of mind, seeing profit as purely and solely the surplus value extracted from the labor of the worker, we would thus say that Costco is even more exploitative than WalMart, would we not?

All of the above is of course most fun but really rather beside the point. We all know that WalMart is an extensive user of labor and that Costco is an intensive one. We really shouldn't be surprised that the pay rates are different in the two models. Indeed, our very basic model, that when a price rises, people use less of something, would predict it. Those who are paying a higher price for labor are indeed using less of it. This simply shouldn't be surprising to anyone.

Which is really rather where we came in, asking whether we were going to deal with WalMart on the basis of an adult intellectualism or the prejudices of a three-year-old. To wish that WalMart move from its current low wage and lots-of-labor model, to Costco's (relatively) high wage and low labor utilization is fine, but an adult view would include the acknowledgement that for WalMart to adopt the second model would require that they fire between 860,000 and 975,000 of their current workforce. The child's view would be that everyone should just be paid more because I want it to be so! -- i.e. that there are no side-effects to such decisions.

As I said up at the top, I think Ezra Klein has indeed identified an extremely important question, quite truthfully, one of the two or three most important issues facing the country. Are we adults or children? If we are to be adults of course we should also apply the same blindingly obvious logic to the minimum and living wage movements. As Costco proves, when companies pay more for the labor they hire, they hire less of it.

As an added extra bonus I look forward to Ezra's speech in which he explains why nearly one million people losing their jobs is going to be good for America. I'd most certainly pay good money to see him deliver it to those he is arguing should get fired.

Tim Worstall is a TCS Daily contributing writer. He recently wrote about why the USA is more like Sweden than you think.



The Fixed Pizza vs. The Rising Tide
Liberals tend to view economics as a zero-sum game. How many times have we heard the phrase: "The rich get richer while the poor get poorer?" This view is a fundamental principle of the Marxist ideology to which the left so lovingly clings. Class struggle is an essential element of Marxism, and in order for this concept to have any meaning, the economy has to be viewed as fixed, unchanging and limited in size. It is, therefore, like a pizza. If one group (the top 20%) have half of the slices of pizza during a given year, then the rest of the people will have to divide up the remaining half. According to this view of the world, the only way to get more pizza for the pizza-poor is to take from those who have it and to redistribute it.

Every major Liberal policy is based on this zero-sum concept. The minnimum wage, welfare, progressive taxation, support for unions. All of these programs depend on the idea of taking from those who have and giving to those who have not. The consequences of these policies are layoffs, higher prices and fewer opportunities to find work. However, those consequences do not occur in a zero-sum world, because the money that pays for health care, minimum wage hikes, etc. is all coming out of the share of the rich. Furthermore, the Democrats get credit on both ends. First, they get credit for standing up to the fat-cats for worker's rights. Second, they get credit for making sure that unemployment benefits are there for all of the newly-fired workforce.

The irrational hatred that Liberals display for Wal-Mart is an outgrowth of this philosophy as well. Profits are the spoils of upper-class rich people who exploit the workers under them. The only way to get more for the workers is to force the employer to give them a greater share.

People with any basic economic understanding know that this zero-sum view is total male-cow excrement. They understand that a rising tide raises all boats. They are aware that economic growth means that the pizza gets bigger each year. A bigger pizza means that even if the number of slices that each group gets is the same, they still have more pizza than the year before. They know that they can improve their lives without taking from the rich.

Liberals are ocnstantly spouting dangerously stupid philosophies, but the leaders in the business world and politics never seem to call them on it. The problem is now that so many people have never heard the other side of the argument that they accept this sort of reasoning. I can only hope that Wal-Mart will show some testicular fortitude in dealing with this issues, and point out some of the things that Mr. Worstall discussed in his article.

How dare you use facts, logic, reasoning, analysis, and tradeoffs!!!
To do such things is unfair to 3-year olds. They won't understand you.

WalMart and Sam's Club
The Sam's Club portion of the Wal-Mart enterprise is easily compared to Costco as the target market and marketing concepts are nearly identical. Has anyone been able to compare the employee compensation, sales per employee and profit per employee of Sam's Club with those of WalMart and Costco?

How do they do it?
The key to the success of the WalMart formula is that they are able to undercut every competitor in price, yet make a handsome profit. Everyone knows that.

So how do they do it? By efficiently transferring the profit margin of the entire operation from the hands of 1.8 million employees, working in 6,000 stores, into the pockets of five (5) people-- all named Walton, and none of whom do any work.

Even the CEO of the company, a worker like the rest, only makes a modest $1.2 million in salary-- plus, of course, an additional $21 million in bonuses, stock options and awards (2004 figures).

But the principal shareholders, all Waltons, walk away with a billion dollars a year in dividends, while sales associates earn an average $8.23 an hour and cashiers a mere $7.23 an hour, And both are required to work mandatory unpaid overtime.

On the other end, how do they trim costs from their suppliers? By nailing them to the wall. Typical of their strategies is to take a small overseas company making widgets for wholesale at one dollar per. They place an order for 250,000 widgets monthly, swamping the factory's ability to produce them.

On the strength of the order the factory borrows money to build a new plant, satisfying WalMart's demand. So they say fine, we're all set to go.

And Wally says "Oh, too bad. Something's changed. We can only pay 58 cents per now. Still interested?" Putting them between a rock and a very hard place.

Still and all, Wally can offer you that widget for only $1.19... while workers in China have to take a stiff pay cut from their normal chicken feed rate of recompense.

So if one were to come up with a singularly bad example of a model for capital utilization, it would be hard to find a worse one than WalMart.

There is a down side to wal-mart though...
...and that is that they get money from Gov.

Many Democrats believe is is even worse than a Fixed Pizza...
...they belive in a shrinking pie. Consider most peak oil fear mongers are democrats as were the Paul Erlichs and the Club of Rome doom sayers.

Seriously, apologies, I’ll go and stand in the naughty corner now, shall I?

Wal-Mart: The Good Guys
Wal-Mart is an efficient company in a very competitive world market that creates value for millions of consumers and employees. So why would so many so viciously attack such a successful organization? Maybe by attacking a successful firm and industry, the attackers can divert attention from the real problems.

In the last few decades Wal-Mart has been a leader in enhancing productivity and controlling costs. This has resulted in value to the consumer and macroeconomic inflation control. On the other hand, the health care industry and the higher education industry have been the principal contributors to inflation within the US economy. These two industries alone are probably responsible for 1-2% of overall inflation, which translates into 1-2% higher mortgage rates for many home owners. Consumers are paying additional billions to prop up the non-competitive and mismanaged healthcare and higher education industries. Meanwhile, associates of these and other rent-seekers divert attention to Wal-Mart, the competitive oil industry and other pet projects…such as resurrecting a 21st century version of the disastrous protectionism of the 1930’s.

Someday the principles of the market will hopefully return to the healthcare and the higher education industries…they will become Wal-Martized. And not a day too soon.
Meanwhile, Wal-Mart should stick to their business model…they are the good guys.

Would be interesting
While I was looking around for the numbers I thought of this, yes, the two are indeed direct competitors, same business model. The reason I didn’t do that comparison (and I’d be very interested to see one) is twofold:

1) Sam’s Club figures are not broken out in the annual report. To get them would probably require gaining the co-operation of WalMart itself and I doubt that I’d get it.

2)That’snot actually what the cry from hte left is. For example, Ezra does not say that Sam’s Club should pay like Costco, rather, hesays that WalMart should: which is, as Ihope I make clear, the same as saying that all of WalMart should adopt the Costco labor efficiency.

The size of the retail pizza
The retail business in indeed zero sum. It can only make gross proceeds, and in consequence profits, as a factor of the size of the disposable income of all workers in America. What WalMart does by undercutting competitors is twofold. First, they offer products on sale for less-- meaning workers in their alternate guise of consumers can fill their shopping basket somewhat more fully.

But second, they drive competitors out of business-- replacing the lost jobs at the mom and pops with lower paying jobs with Wally.

Plus which, much of the money recycled into Wally's hands ends up out of the consumer loop, as it goes to dividend bearers who reinvest the money generally rather than using it to purchase more goods. So the absolute size of the goods-to-purchasing-power pizza shrinks over time.

The long term prognosis is a transfer of income from the working classes to the investing classes, with a consequent loss of vigor in the retail economy.

Adopting Costco's efficiencies
Costco does manage to stay quite profitable for its investors, while at the same time offering a really good deal to both its employers and its customers.

On the principle that the best rising tide is the one that lifts the most ships, wouldn't Costco be a better model for you to plug than WalMart/Sam's Club?

WalMart socialism
In all fairness, WalMart is not only what you say but an engine for the transfer of cash from the federal government to the pockets of five individuals.

The USG supplements the wages of Wally's subpoverty level employees to the tune of $1.2 billion annually. That money goes into the sausage machine.

What comes out at the other end is unearned income-- dividends-- to the tune of one billion dollars annually just to five people named Walton. Who then lobby the United States for the abolition of inheritance taxes.

The retail business in indeed zero sum. It can only make gross proceeds, and in consequence profits, as a factor of the size of the disposable income of all workers in America.

Roy, do you understand how substantively bankrupt that prattle is? Don't get me wrong, I'm sure your notions here are as mistaken as your rants on GAAP and other things, but I really can't tell. What you've merely done here is assemble a series of words together that are utterly meaningless. Take a breath and shoot for simplicity. Don't just assemble a group of words together.

I'm sure you think this is a coherent and succint argument. Its not.

Err, Roy?
Roy, did you actually read the piece? I state, openly, that WalMart could indeed adopt the Costco model. The only problem is that if they do so nearly a million people will lose their jobs.

Or did you miss that bit?

Examples of Unearned Income and the Green Eyed Monster
I loved how Roy attaches the pejorative "unearned income" to dividends, forgetting that the capital invested is at risk. Of course Roy has no problem with truly unearned income such as:

Food Stamps

Temporary Assistance to Needy Families

Medical Assistance

Housing Subsidies

Interesting however that in a prior rant, Roy has, in the past, admitted to be a small time investor and therefore, presumably, at least the occasional recipient of dividends, aka unearned income, himself.

Tim consult FASB 131
Tim, the rationale and criteria for breaking out distinct portions (segments) of a business is currently governed by FASB Statement 131 according to the following criteria:

(1) revenue is 10% or more of combined revenue;
(2) operating profit is 10% or more of combined operating profit (operating profit excludes unallocable general corporate revenue and expenses, interest expense, and income taxes); or
(3) identifiable assets are 10% or more of the combined identifiable assets; also called line of business reporting.

There are other considerations to segment reporting, but thats the meat of the matter.

As a matter of practicality, however, no more than 10 segments will be shown.

Sam's Club is apparently not meeting the criteria.

First, retail is NOT a zero-sum game. As wages increase, purchasing does too. And despite the claims of the left-wing anti-business fools, wages HAVE been increasing.

Second, have you ever worked at a Mom and Pop shop? The idea that Wal-Mart pays less is ludicrous. Ma and Pa may make a better income due to profit, but their workers are rarely as well off as Wal-Mart employees.

Finally, business is all about competition. If the marke wants lower prices, then the low-price leader will succeed. The anti-Wal-Mart people are, yet again, trying to plan the economy, al la Marx, rather than let the market do their thing.

In addition, old beanie boy again shows he know not what he is talking about. Whether or not Wal-mart profit is used for purchasing more goods (obviously, if Wal-mart can sell more, it will purchase more to sell), or the money is reinvested, the market uses that money to grow the economy. Wal-mart has done more to INCREASE the goods-to-purchasing-power pizza than anybody else, which is why people shop there, and beanie creates a false boogeyman to deny that.

Wall-mart is not causing a transfer of income from the working classes to the investing classes at all. In fact, because of Wal-mart's size, it can FORCE manufacturers to sell a product for LESS, and that money is instead paid in wages (try reading the article, beanie boy, as Wal-mart employs a HUGE number of people). LESS money goes to the profits of other companies, and stays in the consumers pocket, to be invested or to purchase more goods.

But beanie doesn't care about reality or economics. He likes to bash his bogeymen. Have fun in la la land bashing your fantasy demons, ole beanie boy.


Let's Take up a Collection....
Are you suprised that ole Beanie rails against capitalists? I say we all take up a collection to send the beaner off to Cuba or North Korea, so that he can bask in one of the workers paradises of today. Obviously, he is in deep pain watching the USofA devolve into excessive economic growth and prosperity. The beaner would prefer to live where everybody is equal (and poor). I'll drop $25 toward a plane ticket. Anybody else?

Maybe LiberalGoodman, Stephen, and Lemuel would like to join him as well?


Defending the Walton's
"..Who then lobby the United States for the abolition of inheritance taxes."

Over 90% of US Government tax revenue is paid by corporations and the top 20% of individual income earners.
The Waltons pay corporate income taxes and substantial personal income taxes. The wonderfully efficient and effective US government is principally financed by the Waltons and friends.

Since the Waltons have been taxed twice on the same income for their whole lives, taxing that same income again at death is bordering on unconstitutional seizure of private property.

Another Misconception -Investing
"as it goes to dividend bearers who reinvest the money generally rather than using it to purchase more goods"

So, "reinvesting", isn't worthy spending? If I build a commercial real estate property, with the intention oif running another store, thats "reinvesting", but I assure you, to the guy spreading concrete, the one doing HVAC, the one doing the plumbing, etc, its revenue. Same for the people selling concrete, blocks, pipes, fixtures, door and windows, paint and everything else you need to have a habitable structure. Investing is not hiding money under a pillow, its spending just the same as if I go buy a car.

Roy wise up, get off TCS and take a couple Econ courses if you insist on commenting so you know what you are talking about. I don't want to hear how you don't have time, you have plenty of time to spend here.

Don't forget
Rhampton. Lord God Cut and Paste.

On a grander scale, we should excise a couple of the states that subscribe to socialism. I'm thinking perhaps, Vermont and Massachusetts.

Thats four less screwed up senators, a number of house whackers, etc.

The People's Republic of New England...hmmmm

roy, you must work really hard to maintain such an incredible level of ignorance.
1) Retail is not a zero sum game. As prices go down, people buy more. Even if net disposable income stays the same. You are also still pretending that America is the only game in town.

2) The wages at the mom and pop stores were for the most part, much lower than what Wal-Mart pays.

3) Money in the hands of investors is not out of the consumer loop. Investing money does not cause it to disappear, it just moves from one hand to another. What the heck do you think the investee does with the investment? Put it in a mattress? No, he spends it, to buy things to build his business.

4) This transfer of income from one class to another exists in your imagination only. Besides, more and more, the worker class and the investment class are becoming indistinguishable.

Marx said it,
I believe it,
that settles it.

I'm guessing that you either didn't read the article, or have managed to forget it in just a few min
Costco uses about 1/4th the amount of labor as does Wal-Mart. Adopting the Costco model would require Wal-Mart to fire about 3/4ths of their workers. Is that what you want, to put a million people out of work?

roy does let envy get in the way of thinking, doesn't he.
Let me get this straight, Wal-Mart's business model is to transfer money from workers to the Waltons?
I've read about a recent Wal-Mart store being opened in the (I believe) San Francisco area. For 400 jobs, they had something like 10,000 applications.

Seems like the workers don't feel they are being ripped off? But as usual, roy declares he knows more about what is good for us, then the actual people do.

If Wal-Mart is nailing it's suppliers to the wall, why are so many suppliers so eager to sell to Wal-Mart. I don't know of any federal law that requires people to sell to Wal-Mart, or even work their?

Now roy gets extra hypocritical
Over in the AGW threads, roy is always chastising people for getting data from what he considers to be biased sources. Refusing to even look at some that he considers, from the name alone, to be extra biased.

Yet he tells us that we need to go to a site called
"Wake up WalMart", to find the real information.

That some Wal-Mart employees also get welfare, is evidence that the welfare system is way to generous.
Wal-Mart's pay is comparable to other retailers, as is the percentage of employees on welfare.

Then roy gets into his usual class warfare nonsense.
First, dividends are unearned income. I guess that means that it's ok for the govt to take it, since it wasn't earned anyway.
Then he gets real heated over the fact that Sam Walton's heirs are earning a lot of money.
Then he gets a final jab at the fact that there are many people (including a majority of the American public and the vast majority of economists) who want to get rid of the death tax.

I got news for you roy, Sam Walton's heirs did not pay a penny in inheritance tax, and neither will his grandchildren.

I don't believe that it's dividends that upset roy so much. I'm sure that he believes that HIS dividends are completely earned.

It's pretty obvious that what has roy's panties in such a wad is that Sam Walton's heirs are making so much more in dividends than he is.

let's not limit it to states
If the good people of San Francisco were to join roy in his socialist paradises, CA as a whole would start voting much more rationally.

let's make it complete
and add bobjones.

Investment is better than consumption
Investment adds value to the system, consumption withdraws. Consumption for consumptions sake is waste. Its like the people that think wars are good for economies. The way I see it Walmart just takes the more of the middle man out of the distribution chain. Wages, and consequently prices should be falling in nominal terms to balance with the rest of the world if it weren't for our accelerated borrowing.

How could I forget?

a faulty assumption
You are assuming that Roy sees it as a problem that a million folks lose their jobs.

A million folks out of work and ten million poor inner city folks paying higher prices than higher income suburbanites are very minor costs to pay for ideological purity and political dominance in some circles.

Wal-Mart's Christian Backlash -- part 1
Are Wal-Mart Values Family Values?
The Conservative Voice, August 27, 2006

...Matt Barber, Corporate Outreach Director for Americans for Truth, expressed his disappointment with Wal-Mart today for further capitulating to the powerful homosexual lobby by recently partnering with the "National Gay and ******* Chamber of Commerce;" an extremely influential homosexual organization steadfastly devoted to furthering the 'gay' agenda within corporate America.

"It's a real shame, and I think people who value traditional marriage and the Biblical model of human sexuality should sit up and take notice of WAL-MART'S RECENT SUPPORT OF RADICAL PRO-HOMOSEXUAL/ANTI-CHRISTIAN GROUPS AND POLICIES that seek to destroy the time-honored institutions of marriage and family, and further aim to silence proponents of traditional family values," said Barber.

...Peter LaBarbera, Founder and President of Americans for Truth added: "WAL-MART HAS ALWAYS BEEN A FAVORITE OF GOD FEARING MIDDLE AMERICAN CUSTOMERS who hold traditional family values ... It risks entirely alienating the vast majority of its customer base. Perhaps this great corporation with such an impressive history should play Switzerland in the culture war, return to a position of neutrality, and get back to doing what it has always done best -- selling high quality products at the lowest prices available."

Americans for Truth ( is the only national pro-family organization solely dedicated to exposing and opposing the anti-Christian homosexual, bisexual and transgendered agenda.

Wal-Mart's Christian Backlash -- part 2
Christian Groups Condemn Over-the-Counter Plan B
The Christian Post, August 27, 2006

...Focus on the Family's Earll pointed out that although the pill is promoted as an "emergency" contraceptive, there is nothing preventing women to take it routinely which can result in harmful side-effects with long-term use.

Family Research Council has also expressed strong opposition to the over-the-counter sales of Plan B.

The drug's manufacturer, Barr Pharmaceuticals Inc., said it aims to begin non-prescription sales of Plan B by the end of this year. Walmart, the world's no. 1 retailer, announced on Friday it will carry Plan B for over-the-counter sale possibly by the end of the year, according to CNN.

Question from a Devil's Adovcate
Let me just say that I agree with Tim, but having read Ezra Kline's piece I think Tim should address one of the issues Kline raises. Wal-Mart is a very profitable company and Kline asks why some of the profits couldn't be reduced by way of paying employees more. A liberal will say that profits of the kind that Wal-Mart makes are excessive and could go toward raising employee pay (basically, redistribution of wealth). Regardless of whether or not that's a legitimate thing for the government to force Wal-Mart to do (I think it is not), what I wonder is what would the economic impact be if Wal-Mart did reduce its profts by paying its employees more?

Wal-Mart's Christian Backlash -- part 3
Sam's Club to reinstate 'Christmas'
WorldNetDaily, August 29, 2006

Just days after the American Family Association launched a campaign to encourage Sam's Club to return "Christmas" to its "holiday" ads, the retailer has announced it will be highlighting the Christian event in future publications.

...Last year, both Target and Sears were the subject of temporary AFA boycotts because of their ad policies that neglected Christmas. Both campaigns ended, the Target effort after nearly 700,000 people signed an AFA petition on the issue.

Concerned Women for America also worked on the issue last season, compiling three lists of businesses, categorized by their recognition of Christmas as the "reason for the season."

Last year, stores were dubbed "nice" for "honoring the reason for the season" and "scrooges," for having "removed the mention of Christmas from their business."

"Somewhat naughty" straddled the middle, and included Wal-Mart.

Every business has to make compensation decisions. Pay too little, you get poor quality employees, higher turnover, higher absenteism, a greater need for training, etc.

On the other hand if you pay a little more than necessary, you invite excess applicants, overqualified applicants and should there be a downturn in business, you lose the staff reductions that come with voluntary departures, so you end up making big headline grabbing layoffs.

Obviously, this is an art, but the bottom line remains. Nobody who remains at Walmart does so because of a tether. If wallyword pays too little, people will look elsewhere.

Also people are individuals. No evaluation system is perfect, but there's a strong tendency to be better compensated if you show up and perform.

Sorry Rodney, Different Topic
The matter being discussed is the ECONOMIC effects of Walmart.

I have no dog in the fight other than to dispute Roy's ridiculous dialectic masquerading as enlightened criticism-well that and his apparent hypocrisy in cooperating with the evil empire.

I'm guessing that rhampton actually thinks he's made a point here.
My only guess is that he thinks that since he has found a few conservatives who are mad at Wal-Mart, then the rest of us (whom rhampton typically labels as conservative)
must be hypocrites for blasting liberals who are mad at Wal-Mart.

If you reduced Wal-Mart's profits to zero, you would only add a penny or two per hour to the wages of Wal-Mart employees.
1.5 million employees
~2.72 billion

Additionally, profits are the mechanism by which markets indicate which sectors are in need of the most investment.
Remove the signals, and you end up with insufficient investment.

Christian Economics
Some Conservative and very influential Christians believe that their religious values take precedence over pure economic or political considerations. They want Wal-Mart to be a force to perpetuate a specific set of religious values upon its diverse customers.

Are Wal-Mart Values Family Values?
The Conservative Voice, August 27, 2006

...Americans for Truth indicated its intent to further investigate and report on Wal-Mart's recent endorsement of the homosexual lifestyle, and to request a meeting with Wal-Mart officials to ensure that its family-values employees will not be discriminated against in light of Wal-Mart's growing support of the anti-family, anti-Christian homosexual lobby.

"We'll talk with Wal-Mart," said Barber; "and then determine whether it's necessary for us to further educate Wal-Mart customers -- and employees -- on a wide spread basis about the new and not-so-impressive left-wing values now offered to Wal-Mart shoppers."

Once Again, Off Topic
"Some Conservative and very influential Christians believe that their religious values take precedence over pure economic or political considerations. They want Wal-Mart to be a force to perpetuate a specific set of religious values upon its diverse customers."

Part of that diversity is the Christian customer base. Of course you want Walmart to go out of its way to offend Christians as evidence that it is "sensitive to diversity"

Then again, you posted three snippets in your usual way, that DON'T HAVE ANY RELATIONSHIP to the labor practices of Walmart, they don't even mention it.

Thanks Roy - now I can die happy once I see an elephant fly
You just accused Walmart of lowering the wages of workers in China. Is there no act too dastardly for the evil Waltons.

I should think you would have long since taken up full time picketing in front of your local store.

You are sometimes way too much Roy.

John Boy says Night, Roy Bean
If he were only so upset with the "unearned income" known as federal tax revenues.

Kind of funny him compaining about Walton's not working, but he clearly has a lot of time to post here.

Time for John Boy to say "night, Roy Bean" and when he complains its not his bed time or starts some weird discussion about sleep not being sleep unless its REM sleep and starts saying nobody can sleep because of the policies of the Bush administration, grandpa gets enraged and smacks him across the head with a boot, closes the door and lets me cry himself to sleep about how unfair the world is, until he nods off to get up at the crack of noon to complain about how he can't find decent employment that pays a "living wage" and lets him work 29 hours a week.

At this point, they all agree to suspend their temperance and get a little of the Baldwin ladies' "recipe" and force feed him until he makes sense or shuts up.

Same-Sex Partner Health Benefits
Wal-Mart Preparing to Offer Another Carrot to GLBT Community
Agape Press, December 15, 2005

According to AFA Journal, Wal-Mart appears to be caving in to the pleas of homosexual activists, as evident from an internal memo issued in April, noting the approval of a "gay, *******, bisexual and transgender" (GLBT) group within the corporation.

GLBT Associates is one of seven Associate Resource Groups, also referred to as Affinity or Network Groups, recently approved by Wal-Mart as part of a new program. The purpose of the new effort is to "enhance our ability to attract, retain and develop female, minority and representative talent in the Home Office," the memo stated.

In addition, it said that these are "groups of associates with common interests or backgrounds who wish to contribute to each other's professional development, foster a sense of community, and enhance their individual and collective abilities to contribute to Wal-Mart's business mission."

But AFA chairman Don Wildmon sees it this way. "Based on the memo, WAL-MART IS RECOGNIZING HOMOSEXUALITY AS EQUAL TO RACE AND NATIONAL ORIGIN," Wildmon stated in April, adding that in his opinion "it is only a matter of time before this group demands SAME-SEX PARTNER HEALTH BENEFITS, 'pride parades,' and diversity workshops."

AFA says Wal-Mart in "Downward Spiral"
Pro-Family Group Rips Wal-Mart for Promoting Brokeback
Agape Press, March 24, 2006

...Randy Sharp, director of special projects for the Mississippi-based AMERICAN FAMILY ASSOCIATION, says the movie -- despite winning three Academy Awards earlier this month -- is not "family-friendly." And it does not belong on the shelves of a store that has marketed itself to middle America, he adds.

"It's quite obvious to anyone who shops at Wal-Mart that they're no longer the family-friendly company that they used to project in their image," says Sharp. "We've seen a downward spiral trend by the Wal-Mart Corporation in which they are more and more becoming like the world rather than the family-friendly company we grew up with."

The pro-family activist contends the giant retailer is abandoning its core principles and moving "further and further away" from its historical family-friendly image. "It's becoming now more important for Wal-Mart to make money than to serve consumers," Sharp observes.

And that approach to business, he believes, is outside the scope of anything Wal-Mart founder Sam Walton ever dreamed. "His business purpose was to supply a good product at a good price," the AFA spokesman shares. "And now ... it seems [that Wal-Mart is saying] 'We're going to do everything we can to make another dollar, regardless of how our customers feel.'"

Are they trying to pass laws?

And the point is?
GLBT groups have been using the same tactics.

However, any company with a long range view would be watchful of how many children their customers have.

There are many groups that do not abort and have more than two children. And most are not modern liberals.

Wal-Mart -- pro family, pro-gay, pro-customer
"However, any company with a long range view would be watchful of how many children their customers have. There are many groups that do not abort and have more than two children. And most are not modern liberals."

Thanks -- I was hoping you might confess your true thoughts on the matter.

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