I’ve been seeing a lot of uneducated bullshit about minimum wage laws and especially comparing Costco to WalMart and what the shady CEO of Costco said in endorsing a minimum wage increase. No,…
Yes I hate ppl. Bottom line is Wal-Mart can more than AFFORD to pay its employees more they just CHOOSE not to. There isn’t some magic economic reason why costco can do it, they just have an ideology of people over profits. If walmart gave every one of its minimum wage employees a $2 raise they might only take home *gasp* 18.7 billion dollars instead of that 19 they need just to stay alive *eye roll*. High turnover costs walmart far more than it makes them. As far as why it should be mandated by government well that’s because we have history books full of stories about how business choose to treat their employees when there is no minimum wage.
From the figures I’ve seen, Costco makes more revenue per employee and more profits per employee than WalMart. Why don’t you advocate for Costco to give them a raise? You won’t because you’re ignorant, confused and brainwashed.
WalMart can give employees a raise, but they aren’t obligated to do so, just like Costco isn’t obligated to do so. Or the employees can guy a large chunk of WalMart shares and vote at shareholder meetings to alter the company charter so that employees receive a percentage of all profits. Or they can negotiate higher wages. Or they can quit and find another job because they aren’t slaves.
But the reality is that WalMart is free to pay employees whatever it wants and employees are free to accept it or to find another job. If you took your idea of legislating or mandating WalMart to act in a certain way, that same logic can be applied in reverse. WalMart can have laws passed that requires people to work for them right after college for the minimum wage. Because that’s the world you enter into when you start forcing people via government mandate. If you think this would never happen, we essentially do the same thing with car and health insurance right now.
What if the government mandated that you now have to pay more money for everything just so that extra money went directly to fund employee paycheck. Say we made it a 10% added tax on everything that you bought. How would you feel about that? If you agree with it, why don’t you start tipping every single employee a share of 10% of whatever you just spent at their place of employment?
If WalMart could make more money by reducing turnover and paying higher wages, they would have done it by now. But they can’t. Trust me, the largest company on the planet is collectively smarter than you, I or Obama combined. They have thousands of highly educated, highly motivated and very, very well paid corporate guys working in finance, BizDev, and economics. If they could forecast higher profits via higher wages, they would have switched a long time ago.
The problem with the idea that higher wages creates less turnover is that the dummies that advocate such ideas forget that it’s not just the higher wages, it’s the relatively higher wages. That means that if everyone was paying the same as Costco, then Costco’s turnover rate would increase because the alternatives for employment would all of a sudden be greater and more appealing. But Costco enjoys low turnover because their wages are relatively higher. If employees could make roughly the same money or more doing less labor intensive work than what they do at Costco, they’d leave Costco. But Costco has to pay higher wages, some on par with corporate jobs which are considerably higher in skill requirements because if they didn’t employees would leave.
If the minimum wage was increased to $17/hour to meet Costco levels (or is it $21/hour) then WalMart might still have high turnover because all of the alternative employment would still be relatively equal in pay. There would be no wage penalty for leaving WalMart.
Which brings me to my last point, Costco doesn’t advocate that the minimum wage be set at the same wage rate that they pay. Why? Because of what I explained earlier. Then they’d have an increase in turnover and would have to ultimately spend more money or lose profits or pay more to employees. That’s why Costco advocates for a raise in minimum wage, to punish competitors, but cap that raise so that they don’t punish themselves.
I’ve been seeing a lot of uneducated bullshit about minimum wage laws and especially comparing Costco to WalMart and what the shady CEO of Costco said in endorsing a minimum wage increase. No, Costco’s higher wages…
And all of that applies to the wage difference between costco and Sam’s club (owned by Wal-Mart) because???
Because of the sames reasons. Different product offering. Costco carries better quality goods which carry a higher price and have higher margins.
Sam’s Club targets just above WalMart shoppers and just below Costco shoppers. Sam’s Club also tries to target small business owners. In fact, their slogan used to be ”We Are In Business For Small Business”. They dropped that slogan as they tried to capture more of the middle class consumer segment, but they still cater to small businesses.
Hate to go anecdotal on you, but my dad owns gas stations and he never shops at Costco for the stores because they are significantly more expensive, especially for cigarettes, sodas and snacks.
With all of that said, good for Costco for paying employees more, having low labor turnover and so on. But WalMart and Sam’s Club offer a different service for a different demographic of people. We should be happy that we live in such a wonderful world that we have such abundant choices.
Let’s just pretend that it was better for your business to pay employees more money, that doesn’t mean we should mandate it and govern it by federal law. It should still be a choice. If a business chooses to pay less, that’s on them and that’s between them and their employees, who work for them on their own accord.
There are obviously great benefits (and great demand) for selling high quality goods in bulk (Costco) and low quality goods in bulk (Sam’s Club) as well as low quality goods at low prices (Wal Mart). Each of these different business models benefits different demographics. Why would you want to make it so that some of these business models can no longer legally exist? Do you hate people?
I’ve been seeing a lot of uneducated bullshit about minimum wage laws and especially comparing Costco to WalMart and what the shady CEO of Costco said in endorsing a minimum wage increase. No, Costco’s higher wages don’t lead to the company profiting more. And no, Costco didn’t profit more than…
Did you really say that costco caters to a different area of the market than stores like Wal-Mart and then turn around and call them competitors? If they’re not catering to the same areas of the same market how exactly are they competing? Are you implying that companies like say in n out burger and gap also cater to different markets than their “competition”?
Yes I did and yes it makes sense. Put on your learning shoes, you’re about to get learn’d.
WalMart and Costco are in the same industry. They compete within the same market. There is some overlap in customers. But for the most part, they are only indirect competitors.
There are direct and indirect competitors. Direct competitors sell the same product and indirect competitors cater to the same product but usually carry alternative products. You can be a competitor with someone without catering to the same exact market segment.
For example: McDonalds and Islands are indirect competitors. In a vacuum, if McDonalds stopped existing, Islands would gain a part of the business which McDonalds left behind and vice versa. But McDonalds isn’t in direct competition with Islands. They have partially similar products, sure, but it’s not the same product and the segment of the market that they target are different. Most people aren’t debating between a $3 dollar meal at McDonalds or a $15 sit-down meal at Islands.
However, if you can force your market competitors to have to increase prices, you now price them out of their own segments and you force them to shift into more direct competition with you. For example: If WalMart has to pay more for labor, they will either dump some labor or increase prices. If they dump labor, quality of service and/or goods might go down and people might start evaluating alternatives and substitutes. Or if they increase their wage costs, they will then either increase prices to keep margins static or they will lose margins to keep demands static. Either way, it’s not good for the business and might cause them to lose money, go broke or have to shift out of their business model and into a different one.
I could go on, but I don’t care and it’s time to go home so do yourself a favor and go read stuff and things.
Of course. The rising price of food is due to “the weather.” Not the fact that the Fed has created more new dollars in the last five years than in the last 100 years of its history. Keep telling yourself it’s the snow.
The CPI doesn’t capture the true extent of inflation as Peter Schiff wonderfully illustrated in this video. The Fed routinely states that it’s “target inflation rate” is 2%, meaning that over the course of an average human life the American dollar will lose 75% of its value. The powers that be have succeeded in convincing the world that inflation is good and that -gasp- deflation is the bane of our existence as if nothing could be worse than falling prices.
And it seems you can’t turn on the news today without reading some sort of hand-wringing about income inequality with no mention of the Fed’s policies whatsoever. The Fed is handing over ~$70 billion dollars a month to Wall Street banks in order to “stimulate the economy” and is clueless when asset bubbles in stocks and bonds and real estate grow to obscene levels. Who benefits when the stock market breaks records daily? Is it the average family living paycheck to paycheck or the Donald Trumps and Warren Buffets? The Fed is the primary driving force behind the strains on the poorer Americans. When the price of groceries or fuel or other consumer goods grow it doesn’t impact the wealthier demographics to the extent that it strains the lower income earners (especially those on fixed incomes).
And this article mentions the Fed a grand total of 0 times.
Sad thing is that most people will read this and then start screaming for wage increases, perpetually locking them into this game where their wages are always chasing inflation, and losing. Every time wages go up, prices move and then you have to wait until the next quarter or next fiscal year to receive a raise.
That’s not a solution, that’s a temporary fix.
The real solution is to curtail inflation, stop printing money and stop borrowing money that we can’t afford to pay back.
The goal shouldn’t be to raise current wages. The goal should be to raise the value and buying power of current wages.