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comment by wasoxygen
wasoxygen  ·  117 days ago  ·  link  ·    ·  parent  ·  post: Apples and Walmarts

There are some good comments on the post, better than average internet quality, and they make me feel that the $20B calculation has too many assumptions to be very useful. We don't know how many workers make $10/hr; Walmart claims an average of $13.36. Many workers are overseas. We don't know how many are part-time. Noncash benefits are left out.

The comparison to Apple is a stretch, but even other retailers like Costco have very different profiles. Costco has far fewer employees, and far higher revenue per employee than Walmart. Perhaps satisfied employees work harder, or perhaps Walmart operates in different demographic areas with different shopping patterns.

It reminds me of an old conversation.

Say a Walmart wants to make a small expansion and has a budget of $30/hr for additional labor. What are the options?

Option 1 Hire Alice, Bob, and Charlie at $10/hr each. The Harvard comparison, claiming that there are many more applicants than open positions, suggests that this is what the unfeeling textbook would call oversupply. The market-clearing price is below $10/hr, so the textbook says to maximize market efficiency and ignore everything else Walmart should hire more people at a lower salary.

Option 2 But we can't ignore everything else. We want Walmart employees to be able to eat. So the alternative is to hire Alice and Bob at $15/hr each.

Question: What happens to Charlie?

In practice, Charlie fades away into the crowd of unemployed Walmart associate wannabes, and does the best he can with Plan B. Nobody blames Walmart for what happens to Charlie. But Walmart's decision to use Option 2 is what made Charlie switch to Plan B.

It's not obvious to me that two people making a living wage and one on the street is better than three people making less than a living wage.




kleinbl00  ·  117 days ago  ·  link  ·  

The argument against Walmart is that its $30/hr additional labor budget comes from $10 worth of externalities provided not just by Alice, Bob and Charlie's taxes, but also Dave's, Edward's, Franks, Gary's, Hester's, Ignacio's, Janice's, Katherine's, Lisa's, Mark's, Nancy's, Oliver's, Peggy's, Quincy's, Richard's, Sam's, Theresa's, Ulysses', Verna's, Walter's, Xerxes', Yolanda's, and Zach's.

And that if Walmart can't turn a profit without sucking money out of every pocket in Alphabetsville, Walmart shouldn't be in business.

From a capitalist standpoint, a business that cannot operate without subsidy should not operate and Walmart is a subsidized corporation. From a socialist standpoint, a business that does not enrich the social fabric with its subsidy should not be subsidized and the preponderance of evidence holds that Walmart does not enrich the social fabric of the communities it enters.