The Walmart Tax Every American Taxpayer Pays
usatoday.com
usatoday.com
Abusing the system implies that only if Walmart stops doing the abuse, somehow abuse will stop, but this clearly is not the case.
Contrary to what writers of this article believe, prices are not formed in isolation of buyer and seller, in this case labor is being sold, and if Walmart does not lower the salaries and transfer the savings to the customers then some other company is going to beat the to it and manage to provide the cheapest good for the same quality.
Most people believe that when a company does something X, to achieve a reduction in costs, then it simply uses it to increase it's own profit margin, but they don't understand that instead of increasing their current profit margin, they can increase their future profit margin by selling their products for less by passing that lower cost to the customer.
Calling it a 'Walmart' tax is a spin on things which is aimed to invoke emotional imagery, it's like if NJ lawmakers called a tax as 'Tesla tax' because by bypassing the dealers they are putting more people out of job and on welfare, therefore the tax which will be used increase the benefits is 'Tesla Tax'.
There is a wide welfare structure in America, and the market will reflect that. If you give certain group of people free healthcare, then their employers will stop providing them with healthcare, if they give 3% 401K contribution to all working employees then yes, their employer's contribution will go down by 3%.
This excuse can be used to justify virtually any deplorable behavior by a corporation. "If _we_ don't cut prices by dumping waste directly into the river, another company will!" Costco competes head-to-head with Walmart on prices, and doesn't treat their employees like cattle.
And as someone who worked at WalMart for awhile, their lack of a union (Meijer and Kroger both required I have full weekend availability as a result of their union contract -- and I needed weekends free for my job at McDonald's) and the relative ease of being able to get a job there was a huge part in my own escape from poverty.
This isn't really true. Costco carries less than 4000 SKUs in its warehouses. Walmart carries 40000 SKUs. That's an order-of-magnitude difference.
Costco competes more with (Walmart's) Sams Club warehouse but based on my shopping, their product selections don't overlap. (E.g. Costco has high-end wine that Walmart/SC doesn't carry.)
To make Costco vs Walmart an apples-to-apples comparison, Costco would have to eliminate the $60 to $110 annual membership fees, allow any non-member to shop there, and add 45000 additional SKUs.
I don't know anyone who shops at both Walmart and Costco on a regular weekly basis. Their business structures attract very different shopper demographics.
They can't eliminate the annual fee either because it's literally less than their annual profit (well maybe not in this market but it was a few years ago). Their demographic is people with the financial 'ability' to think $100 ahead for a year, to whom they deliver goods at basically cost.
Walmart vs Costco is a complete myth. Costco operates where Walmart does very poorly.
It is interesting to see the numbers in this article ~$6B in subsidies, and then compare that to dividends/buybacks: oh, look $6B-$7B [1] not even including buybacks. That is a direct redistribution of wealth [edit] from bottom to the top.
[0] https://www.bloomberg.com/features/2015-walmart-union-survei... [1] http://www.vuru.co/analysis/WMT/dividendsBuybacks
But that's not true at all. Unions do not actually benefit all workers equally, they benefit senior workers more at the expense of the more junior workers. And because of Union wage requirements, many times the junior workers are pushed to supplement their income by working in other industries, by suppressing wages in other industries.
Unions have a lot of problems associated with them, you should talk to someone who is young and part of a union and see all the issues they have.
I once had a conversation with an actor who was claiming the huge benefits of actors union and how because of that she is able to afford to have healthcare. The problem with this conversation was that this was happening while she was talking my order at a restaurant where she worked to supplement her income. I mean that defeats the whole point of union, wouldn't it be better if she was able to work more number of hours on screen at a lower wage and increase her skill set rather than working as a waitress on the side?
Nearly all the union attempts to increase wages result in companies either dropping the number of employees they have or drop the number of hours they employ them for. Sadly only the younger or junior workers pay this cost. If you are an older union workers, then there are nothing but benefits for you.
But back to Walmart... sans unions, only a consumer boycott over morals would change anything, and if it didn't [0] happen yet [1], I feel like its not going to... or hopefully it'll boil over in a few years. Personally, I've shopped there twice in the past 10 years - which i guess means i'm stupid since i'm paying a tax for them regardless, but maybe that's cancelled out since i participate in the stock market getting those dividends? I'm confused easily on those things.
[0] http://www.ethicalconsumer.org/boycotts/boycottslist.aspx#w
[1] https://en.wikipedia.org/wiki/Wal-Mart:_The_High_Cost_of_Low...
Costco has the membership fee, and they only sell in bulk, which are usually better quality and higher cost than Walmart items. If you can barely afford Wal Mart, you definitely can't afford Costco and aren't even comparing the two.
Costco also doesn't put its stores in low income areas, automatically selecting for higher income customers.
It's not a justification, no more than if you ask me to shoo away the flies from food and I said "but what's the point, some other fly is going to sit on it", I am not justifying it, I am merely pointing out the futility of your solution. The real solution would involve not having to constantly shoo away the flies.
Anyway, that well-documented boat sailed in the '90s, and now we have Amazon (and I think Amazon deliveries are a net good thing).
What really bugs me is that I have to subsidize low wages at walmart. If the US would just switch to guaranteed income or raise the minimum wage, walmart prices would go up something like 1%, but their employees would make at least 33% more. Then my taxes could be used for something useful, like education.
The Freedom Market™ zealots willfully ignore that Walmart destroys competition, with other people's money.
I do not mind mega corporations being anticompetitive. Sociopath is as sociopath does.
I do mind pretending that its a moral good.
I do mind that I (Jane Taxpayer) is paying the bill.
[1]http://www.cnbc.com/2017/01/27/wal-mart-is-making-it-easier-...
Why does a grocery bagger need to have a livable wage? Seems like a great first job for someone in high school or a nice part-time job to help generate a little extra income.
- hire no grocery baggers
- only hire grocery baggers if they're willing to pay $20 an hour or more
...it doesn't necessarily follow that someone will end up with a living wage from this kind of regulation.
There is also the unintended consequence that (no longer employable) young people are less qualified for future work because they've never learned how to work hard, manage their bosses, etc.
When a single mother is trying to support her family on a minimum wage, yes, that's bad.
But there's nothing wrong with a teenager making minimum wage in his first job.
Have you ever had to support yourself or others while earning minimum wage? Or did your upper-middle-class family fund your college education so you could make a comfortable living as a software engineer? I'm seriously wondering because your tone is full of self-entitled, condescending ignorance.
Yes. The home I grew up in was lower middle class at best, though it's irrelevant to my arguments and generally none of your business.
But since it's now a subject of interest, what is relevant was that earning minimum wage as a teenager helped my blue collar family since I paid for my own clothes, transportation, gas, food, school incidentals, and many other expenses.
I wouldn't have found a job paying $15 an hour. I would have been unemployed (though we don't count poor teenagers as unemployed usually). And my family's budget would have been negatively impacted.
I don't think it's irrelevant because certain foundations predispose one to certain lines of arguments. Particularly
>> If adults with kids aren't qualified for something more involved or demanding than grocery bagging
Not all adults have had an equal opportunity to obtain a skill-set that would qualify them for a better job and once you are stuck barely scraping by with a livable-wage it's very difficult to alter that situation. Culture and upbringing play a large part; children are easily impressionable, those growing up in troubled families or neighborhoods are less likely to do well in school and less likely to gain a skill-set that they would need to provide more value in the future.
> what is relevant was that earning minimum wage as a teenager helped my blue collar family since I paid for my own clothes, transportation, gas, food, school incidentals, and many other expenses.
I think it's great you were able to do that, but that doesn't mean that this minimum-wage would be sufficient for someone without a family to support them, or trying to acquire a skill-set later in their twenties.
Regardless, bringing personal history into it is bad reasoning and unnecessarily divisive at best. And at times it brings out the worst in people.
https://en.wikipedia.org/wiki/Ad_hominem https://en.wikipedia.org/wiki/Argument_from_authority
Companies must abuse every law, regardless of original intent, or risk irrelevance and failing to maximize shareholder value.
The problem is that what's good for the company often isn't what's good for society. It's a function of the basic rules of our society.
If we keep the capitalist model, then the problem is that risk/benefit ratios reward bad behavior. It's extremely hard to legislate soundly to prevent this.
That welfare benefits are means tested complicates things significantly.
- Walmart fires half of their workers and doubles the remainder's pay
- The government terminates the benefits low income Americans receive
- Walmart accelerates the transition to automated stores and fires any workers who receive government benefits
- Walmart doubles all workers pay and increases prices to match, and then closes any stores that fail to turn a profit
- Walmart fires everyone, shuts down, and concedes to Amazon
Ok, let's present the alternative then.
Walmart automates its massive retail operations substantially over the next 10-15 years, using robotics and AI.
Their goal is to match the dollar of sales to employee ratio of, say, beloved Costco. And or try to keep up with Amazon's ability to highly automate its operations (competitive pricing advantages etc).
There went one million jobs, consisting largely of employees with few skills and very limited alternative employment prospects.
Now what? Here's the reality when you remove the one-sided emotion-driven premise in the article: it's better to subsidize those employees to a modest extent, than to a 100% extent (which is the scenario coming for tax payers; the harder / more expensive you make it on Walmart to employ those people, the faster they're going to automate their jobs away).
Also, if you want to reduce the subsidy, raise the minimum wage (or the earned income tax credit, a vastly superior approach; which then begets a further debate on the subsidy), which Walmart has routinely supported. They support it because it harms their weaker competitors, whereas Walmart can deal with it. When you raise the minimum wage, Walmart will either optimize by firing workers / using automation further, or they'll push increased costs onto customers, which gets you right back to the same place in terms of tax payers paying for Walmart's employees (hint: every employed adult in America pays for their employees, they have $485 billion in sales).
>Walmart automates its massive retail operations substantially over the next 10-15 years, using robotics and AI.
You're presenting this as an alternative, but this is happening _anyway_ as soon as practically viable.
Underpaying workers simply moves this break-even point by some years, it doesn't change anything else and is not an alternative.
Do you have any links for further reading on this? From what I've read, they've only raised their min wage from $9 to $10 after protests by their work force. I certainly wouldn't call this support of raising the minimum wage (but perhaps they've since changed their tune?).
No, it would disadvantage competitors that could get by with labor with lower market value per unit of labor, which are not necessarily less efficient (if they were delivering the same output per unit of labor using less expensive labor, they'd be more efficient, for example, not less.)
[1]http://www.cnbc.com/2017/01/27/wal-mart-is-making-it-easier-...
However, many of us do pay a "union" tax. Many local governments have significantly higher taxes because of union negotiated pensions and higher benefits. In addition, Americans also paid a "union tax" when we had to bail out GM a company whose union contributed to it's financial failure.
... and I see the author is the president of a union.
$1.75? I probably don't care. $432? That's more of a problem.
But the article doesn't state it despite it being the headline.
The quickest fix to all the parasitic behavior is to daylight how much its costing us.