"Wal-Mart Could Easily Pay $12 An Hour"

[applegrove]

Wal-Mart Could Easily Pay $12 An Hour

by Stacy Mitchell at ilsr.org

http://www.ilsr.org/walmart-could-easily-pay-12-hour/

"SNIP.....................

Raising the pay of Wal-Mart’s U.S. workers to a minimum of $12 an hour would lift many out of poverty, reduce their reliance on public assistance, and cost the average consumer, at most, $12.49 a year.

That’s the conclusion of a new study published by the UC Berkeley Center for Labor Research and Education. The study is primarily concerned with the question of how raising Wal-Mart’s wages would affect poor families, including both those who work at its stores and those who shop at them. The benefits to poor families, the study concludes, would far exceed the costs.

Currently two-thirds of Wal-Mart workers — or about 900,000 employees — are paid less than $12 an hour. More than one-fifth earn less than $9. Overall, Wal-Mart’s hourly workers earn 12.4 percent less than retail workers as a whole.

Bringing these employees up to a minimum of $12 an hour would boost their annual income by $1,670 to $6,500 (depending on whether they are full- or part-time and their current pay rate). That amounts to a 37 percent increase on average for those earning less than $9, and a 14-16 percent increase on average for those making $9-12 an hour.


....................SNIP"

[dflprincess]

1. But then many of its workers wouldn't qualify for government programs

and Walmart might have to come up with its own employee benefit program rather than relying on taxpayer subsidies.

[liberal N proud]

2. Could, but won't

They just keep running people through at minimum wage and don't have any problem with it.

[Mosby]

3. walmart would have to raise prices a lot to do this.

The real solution is large increases in the national min wage, that way everyone shares the burden.

[niyad]

5. or lose some of their obscene profits.

[BlueCheese]

7. I can't stand Walmart. At all.

But their profit margin is 3.26%, so they don't have a lot of room to maneuver without raising prices.

By comparison, Apple has a profit margin of 23.46%. One thing about Walmart, I guess-- you can't outsource retail workers to China.

[niyad]

9. would appreciate a link to that. kind of hard to imagine that the walton bloodsuckers amassed

their fortune on such a narrow margin of profit.

[hack89]

10. With annual revenue of $420 billion it is not too hard to imagine.

As for the Walton heirs, their wealth comes from the value of their WalMart stock, not from their cut of the revenue.

[Fla_Democrat]

17. Maybe the poster was refering to this?

http://ycharts.com/companies/WMT/profit_margin

Wal-Mart Stores Profit Margin Quarterly:
4.38% for Jan. 31, 2013

WMT Profit Margin Quarterly Rankings

Overall 69th percentile
2462 of 8008

Sector 64th percentile
259 of 728 in Consumer Cyclical

Industry 45th percentile
6 of 11 in Department Stores

WMT Profit Margin Quarterly Range, Past 5 Years
Minimum 3.03% Oct 2011
Maximum 5.20% Jan 2011
Average 3.57%

[BlueCheese]

41. I looked it up on Yahoo Finance, I think.

http://finance.yahoo.com/q/ks?s=WMT

My understanding is that most retail stores operate on very thin margins, multiplied (ideally) by high volume, or in Walmart's case, extremely high volume.

Personally, I don't ever shop at Walmart mostly because of how they treat their employees. But I do think that Apple, for example, is actually in a much better position to pay their employees more without losing competitiveness than Walmart.

[4 t 4]

8. No, not at all, you're thinking about it like we have been told

and it is wrong. WRONG. 100% Wrong ! How much is enough??

The Walton family fortune as of March 2013 published by Forbes.
Christy Walton and family US$28.2 billion[2]
Jim Walton US$26.7 billion[2]
Alice Walton US$26.3 billion[2]
S. Robson Walton US$26.1 billion[2]
Ann Walton Kroenke US$4.5 billion[2]
Nancy Walton Laurie US$3.9 billion[2]
Nathaniel Alexander Walton US$3.9 billion[2]

Total: US$115.7 billion
Not only don't they need to raise prices but they could discount them And still be very, very rich for many generations to come.We are all being sold out!! The real solution might be more cooperate owners that have any kind of heart and not just sick diseased ones that are money hoarders. A hoarder is a hoarder whether it's garbage and knick knacks or money, it is a sickness. Hoardings a sickness. period.

[backscatter712]

15. The Walton family ought to be guillotined. n/t

[PotatoChip]

13. Well, according to the article...

Raising the pay of Wal-Mart’s U.S. workers to a minimum of $12 an hour would lift many out of poverty, reduce their reliance on public assistance, and cost the average consumer, at most, $12.49 a year.

But it wouldn't surprise me that if (hypothetically) Walmart did this, they'd raise their prices far beyond what (according to the article) they'd need, in order to increase their profit margin beyond what they take in now.

I agree w/you about raising minimum wage, though.

[Mosby]

27. Going over the numbers myself

it looks like the 3 billion estimate is pretty accurate, don't know for sure because the average wage and the full/part time split is unknown. Given that they netted 16 billion last year I think they could afford the drop in profit.

Raising prices though would be stupid, their business model is all about having the lowest prices and customers come to expect that, just look at what happened to jc penny last year when they went to "everyday low prices" instead of sales, the change in approach lost them billions of dollars, something they might not completely recover from.

[nadinbrzezinski]

39. And they don't have the lowest prices.

They have selected items, but not lowest. I don't go in there, but that is the reason, one of them, two of my neighbors now shop at Target or Ralph's. they found their preferred brands were available maybe, but can be found all the time at other places, at times at better prices.

[backscatter712]

14. Actually, the study cited in the OP says they don't.

The average Walmart consumer would only pay $12.49 more in a year to cover paying all Walmart workers $12+/hr.

[jeff47]

24. You can't be bothered to read the entire first sentence in the OP? (nt)

[PA Democrat]

30. Not necessarily. Look at Costco, one of Walmart's competitors

Walmart Pays Workers Poorly And Sinks While Costco Pays Workers Well And Sails-Proof That You Get What You Pay For

Costco’s most recent quarterly earnings report reveals a fairly healthy eight percent rate of growth in year-on-year sales—including a five percent rise in same store sales. What’s more, with membership fees rising from $459 million in the same quarter last year to $528 million this year, it’s pretty clear that a significant number of customers are moving over to the retailer to do their discount shopping.

Meanwhile, Costco’s primary competitor, Walmart, saw an anemic 1.2 percent rise in sales, while other competitors such as J.C. Penny and Target TGT +0.22% experienced even greater disasters in their sales results.

<snip>

Without enough employees to get the basic work of a retail operation done—and with those on site being paid a wage so low that it is difficult to expect much in the way of pride or motivation—Wal-Mart merchandise remains stacked on pallets in the warehouse rather than making it to the floor where customers can find the products they want. At the same time, check-out lines are painfully long and annoying as the overall shopping experience continues to deteriorate.

One is left to wonder about the value of offering products at a lower price if those products are not on the shelves when the customer needs to buy them?

http://www.forbes.com/sites/rickungar/2013/04/17/walmart-pays-workers-poorly-and-sinks-while-costco-pays-workers-well-and-sails-proof-that-you-get-what-you-pay-for/

[Mosby]

40. yeah, they could raise wages w/out price increases

After looking at the numbers myself I think their cost estimate of increasing wages to 12/hr for every employee is a pretty accurate. Walmart has a very high net margin (for retail) which would allow for much higher wages.

There is some customer overlap but costco and sams club use a different business model than walmart/supertarget etc. Primarily the average sale is much higher due to the fact that they make you buy extra large packages of everything. They cater to small business and large families, something that regular grocery stores and others don't.

I go into a couple walmarts on the far west side of the Valley, and I don't see long lines or a lot or "outs" on the shelves. Overall they offer low prices and "one stop shopping".

That bagging carosel (sp?) is pure genius, others are already copying it.

[PA Democrat]

42. I think you can draw conclusions about personnel costs

that would apply to Walmart as well.

Pay employees better and you have much lower turnover, you have lower shrinkage (employee theft), you have employees who are more productive and motivated. That is what a study I read comparing Costco to Sam's Club found. I see no reason why you would not see similar benefits for Walmart employees.

Though the businesses are direct competitors and quite similar overall, a remarkable disparity shows up in their wage and benefits structures. The average wage at Costco is $17 an hour. Wal-Mart does not break out the pay of its Sam’s Club workers, but a full-time worker at Wal-Mart makes $10.11 an hour on average, and a variety of sources suggest that Sam’s Club’s pay scale is similar to Wal-Mart’s. A 2005 New York Times article by Steven Greenhouse reported that at $17 an hour, Costco’s average pay is 72% higher than Sam’s Club’s ($9.86 an hour). Interviews that a colleague and I conducted with a dozen Sam’s Club employees in San Francisco and Denver put the average hourly wage at about $10. And a 2004 BusinessWeek article by Stanley Holmes and Wendy Zellner estimated Sam’s Club’s average hourly wage at $11.52.

On the benefits side, 82% of Costco employees have health-insurance coverage, compared with less than half at Wal-Mart. And Costco workers pay just 8% of their health premiums, whereas Wal-Mart workers pay 33% of theirs. Ninety-one percent of Costco’s employees are covered by retirement plans, with the company contributing an annual average of $1,330 per employee, while 64 percent of employees at Sam’s Club are covered, with the company contributing an annual average of $747 per employee.

Costco’s practices are clearly more expensive, but they have an offsetting cost-containment effect: Turnover is unusually low, at 17% overall and just 6% after one year’s employment. In contrast, turnover at Wal-Mart is 44% a year, close to the industry average. In skilled and semi-skilled jobs, the fully loaded cost of replacing a worker who leaves (excluding lost productivity) is typically 1.5 to 2.5 times the worker’s annual salary. To be conservative, let’s assume that the total cost of replacing an hourly employee at Costco or Sam’s Club is only 60% of his or her annual salary. If a Costco employee quits, the cost of replacing him or her is therefore $21,216. If a Sam’s Club employee leaves, the cost is $12,617. At first glance, it may seem that the low-wage approach at Sam’s Club would result in lower turnover costs. But if its turnover rate is the same as Wal-Mart’s, Sam’s Club loses more than twice as many people as Costco does: 44% versus 17%. By this calculation, the total annual cost to Costco of employee churn is $244 million, whereas the total annual cost to Sam’s Club is $612 million. That’s $5,274 per Sam’s Club employee, versus $3,628 per Costco employee.

In return for its generous wages and benefits, Costco gets one of the most loyal and productive workforces in all of retailing, and, probably not coincidentally, the lowest shrinkage (employee theft) figures in the industry. While Sam’s Club and Costco generated $37 billion and $43 billion, respectively, in U.S. sales last year, Costco did it with 38% fewer employees—admittedly, in part by selling to higher-income shoppers and offering more high-end goods. As a result, Costco generated $21,805 in U.S. operating profit per hourly employee, compared with $11,615 at Sam’s Club. Costco’s stable, productive workforce more than offsets its higher costs.

http://hbr.org/2006/12/the-high-cost-of-low-wages/ar/1

[Brickbat]

4. But they don't, because people let them get away with paying less.

[raccoon]

18. In a dumbass "right to work" state, whatcha gonna do? nt

[Brickbat]

38. The same thing people did when organizing was illegal the first time around.

Stand up and get it done anyway.

[rhett o rick]

6. The Walton's wallow in greed to the point that they would kill the goose. Idiots blinded by greed.nm

[NewJeffCT]

22. They need the money, though

to promote privatizing education and funding other RW causes.

[freshwest]

11. The Post Office in my zip code is advertising jobs starting at $15 a hour. WM should pay that.

[My Good Babushka]

12. The truly sad part

is that the workers would lose access to safety net benefits that are equal to our would outweigh their raise in pay. All these years of battling just to tread water. Wages need to be better than that if we want a stable society.

[Nimajneb Nilknarf]

16. To me the truly sad part is that so many people lack the education or training to be able

to obtain employment that is more gainful than that which provides a bare subsistence. I am having a hard time watching people argue over where the bar should be set for people at the bottom level of productivity and compensation.

I'd rather see people given free reign to learn and improve themselves than be paid to remain poor.

[My Good Babushka]

23. There is no reason we can't build a floor and a ladder at the same time. nt.

[Wounded Bear]

28. How libertarian of you....

[Nimajneb Nilknarf]

29. Advocating state-funded education is libertarian?

Who knew?

[Wounded Bear]

31. Perhaps not.....

but lamely throwing out "They should have a better education" doesn't say much.

I'm all for better public schools. I'll pay more taxes to support that, too. But far too much of the education debate lately has been about for-profit charter style schools that don't educate, they just make money for the investor class.

We do need a higher minimum wage. That's not "paying people to stay in poverty." That's treating human beings with respect.

[nadinbrzezinski]

37. I will go a step further

We need a living wage.

[nadinbrzezinski]

36. You of course realize that Walmart has college graduates among it's ranks

No, not managers, though the bottom tier also qualify for snap and have college degrees, but as hourly employees not getting more than 20 hours a week.

You also realize we pay for their healthcare through public assistance and their food, through public assistance. You need to get out more and try to find what is the reality out there.

Oh and if you are a woman, there is a very real glass ceiling in the company.

[bighart]

19. This is a publicly traded company so it really is the stock holders that would need

to be pressured to make this happen. If stock holders in mass demanded that pay be increased for hourly workers and
started a mass sell off if the company didn't comply it might happen. Absent stock holder pressure the company will continue
business as usual.

[Purplehazed]

32. Good thought, could work.....

...but the Walton family owns the largest chunk of shares. Institutional investors own the next largest group which is spread out over countless, faceless people. It would take intense media pressure to get folks to call the Vanguards and other investment firms and demand that their money be taken out of Walmart stock.

Boycotting on the other hand is much more direct.

[rhett o rick]

33. I would bet the majority of stock is owned by the 1%.

And if the stock holders in the 99% could get together, they would be ignored by a corporation like Walmart.

[bighart]

21. Quick search shows

when you look at average wages for sales floor and back room employees at Target and include team leads the average is $9.32 per hour, if you take out the team lead jobs it drops to $8.88 per hour.

http://www.glassdoor.com/Hourly-Pay/Target-Hourly-Pay-E194.htm

[hunter]

26. The purpose of low wages is to keep workers hungry and fearful.

Same with homelessness.

Tell the uppity teachers they could be working at Wal-Mart. Tell the uppity Wal-Mart workers they could be that toothless bum huddled on the corner with a cardboard sign and a cup.

It's all about controlling the population through fear.

The U.S.A. has become a nation of fearful people.

[DLevine]

34. Spot on. nt

[nadinbrzezinski]

35. This follows the Deimos study

Similar conclusions