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Comment by chipperyman573 | Hacker News Reader

>Earlier this year, Walmart raised its base wage $2, to $11 an hour, and expanded its maternity and family leave benefits

Wow, raising the wage combined with this tuition assistance makes it seem like Walmart is actually trying not be known as the worst employer out there anymore - these benefits are better than some of the retail jobs I used to work a few years ago. I wonder why they suddenly care? Walmart gets its customers because they have low prices (or at least successfully trick people into thinking they have low prices), the kind of people who value that are unlikely to stop shopping at Walmart because of the negative PR around how they (used to) treat their workers.

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>the kind of people who value that are unlikely to stop shopping at Walmart because of the negative PR

Walmart isn't worried about losing the people shopping at Walmart. They just need to continue to sell cheap food, clothes, and household things in order to keep them.

Walmart has always promoted from within. I bet very few people have worked part time in Walmart for 1+ year while going to college for a business degree and not been shortlisted for a promotion. The college subsidy will give them more managers with ground floor experience.

Walmart is very concerned about how to grow their customer base. You see this with the 2day online shipping, site to store, and their grocery pickup program. The increase in wage is a direct attempt to increase employee retention and attract better employees. This is about growth, not loss prevention.

> Walmart has always promoted from within. I bet very few people have worked part time in Walmart for 1+ year while going to college for a business degree and not been shortlisted for a promotion. The college subsidy will give them more managers with ground floor experience.

This was my immediate first thought, retention and loyalty.

A few months ago my mother retired from Wal-Mart after working as a manager for 30+ years, and I've heard all the "fun" stories. Just about every trope regarding lazy, slack ass workers who routinely no-call-no-show, get fired, then somehow rehired six months later is true. There are good employees, to be sure, but they're greatly outnumbered by the unmotivated, and unwilling.

I see this as a way to pull in and retain driven employees, no different than a software company sponsoring scholarships at a university and simultaneously offering internships / future employment. You'll select for the more driven, hard-charging folks and, hopefully, engender a positive opinion of your company in the eyes of the recipients.

> lazy, slack ass workers who routinely no-call-no-show,

What about the lazy, slack ass management that routinely yank hours, refuse to give full-time hours that offer health insurance?

Having come home for the holidays to find mom was scheduled on Christmas Eve on a weekday despite being the weekend manager, I'm not exactly fond of Wal-Mart's managerial practices. Those folks bank on you not saying a word when a "glitch" puts you on for the day you already had approved off.

It's not always everything, but having a manager who was once in the shit usually makes a big difference. Hopefully this program will get more folks who have worked their way up the ranks and know what works so there's better, more informed, and more compassionate management at the store level and higher.

Walmart has a long history of preferring candidates that have a history of being in the shit. Bad managers cost the store in no call no shows, short retention, and disgruntled employees. Managers that have experience in the store can train faster, have higher empathy towards those they manage, and have a deeper understanding of the day to day operation of the store.

Working for Walmart isn’t a fantastic experience, but promoting from within is a great practice they have.

> Walmart has always promoted from within. I bet very few people have worked part time in Walmart for 1+ year while going to college for a business degree and not been shortlisted for a promotion.

A close friend of mine from high school started worked at Walmart while attending University. Interestingly enough, she was a business undergrad and, as you suggest, she was shortlisted to management before even finishing her undergraduate degree. She went on to get an MBA and went corporate within Walmart and is still there today, nearly 20 years later.

> The college subsidy will give them more managers with ground floor experience.

Given the above anecdote, I wonder if their decision to subsidize college is just tied to how grossly expensive an undergraduate degree is today vs. yesteryear.

In any event, they will continue to pull managers from the "competent" pool of employees internally and get good PR at the same time.

> tied to how grossly expensive an undergraduate degree is today vs. yesteryear.

It's not.

One of the 3 colleges in this new program is Univerity of Florida, which charges $6,381/yr, before substantial financial aid offering. https://www.collegedata.com/cs/data/college/college_pg03_tmp...

That's great, but ten years ago it charged half that much. https://www.chronicle.com/interactives/tuition-and-fees

Having spent time in Bentonville AR (population 30,000 and home of Walmart HQ) myself her story is common.

To say nothing of the fact that employees are also customers. Give them more money and there's a good chance it never leaves the building.

They are afraid of Amazon, and realize customer service is going to be their competitive advantage now that they aren't, nor will be, the cheapest/most convenient destination into the future.

Not for everything but Walmart is cheaper on many things. Amazon used to be the cheapest but that is no longer the case. People just assume Amazon is the cheapest for some reason but they’re just the most convenient.

> People just assume Amazon is the cheapest for some reason

They were for a long time, especially when they didn't collect sales tax. Many people just stopped comparison shopping and haven't realized the situation's changed.

> but they’re just the most convenient.

Not necessarily. Oddly enough, Best Buy is the most convenient for me (for electronics), and it's usually not any more expensive than Amazon, at least for the stuff I buy. Amazon less convenient due to the hassle with their delivery delays and packing materials.

> Best Buy is the most convenient for me (for electronics), and it's usually not any more expensive than Amazon

They will also price match Amazon in most cases. I hear a lot of people complain about Best Buy but I’ve made a few big purchases at my local Best Buy store and their employees were super helpful and friendly. I’d much rather shop there and get the item immediately rather than wait two days, personally.

I used to have a very low opinion of Best Buy but I’ve recently found myself going there for the majority of electronics I buy...no shipping or filtering through counterfeits like on Amazon, and there’s one that’s open 24/7 within walking distance of my office in NYC. Employees are friendly and helpful if not extraordinarily knowledgeable. Hard to beat on the convenience front.

Best Buy refused to price match Phillips Hue bulbs for me because they were apparently a "prime" only price.

Made no sense for me to pay more ($20 across 4 bulbs) to get them that day in person.

There are some things I just try to buy local... laptops and displays (TV/Monitors). In the end, if you get a bad one, it's usually apparent within a day or two, and it's far easier to deal with in a store. I think I just have bad luck with TVs and Monitors though. Despite doing research, about half the time I order either via Amazon/Delivery, I regret it (last time 42" 4K monitor was DOA).

Almost everything else, I tend to favor Amazon though. But I find myself looking locally more and more.

And if they are more expensive but I wanted something fast, Best Buy has always price matched Amazon for me without question.

Almost a little bit embarrassing, but to share an anecdote -- I bought a higher-end TV late last year (>$2k) and the price difference on Amazon was $2.

I half-jokingly asked the gentleman helping me if we could price match, and how long that would take. He said that if their automated system "accepted it" then it'd be instant.

Their system did accept it pretty much immediately, and so I saved $2 for about 90 seconds 'delay' (half of which was borderline laughter/seeing if I was serious; I was only half-serious).

Made for a positive experience for me and my wife, and I now won't hesitate to consider Best Buy, via price match, in the future if I'm ordering something that they stock locally. It was also the first time I'd ever asked for a price match in the last 10+ years, if ever. :)

But does Best Buy still have a restocking fee? I found their return policies unfriendly given that they charge a premium for the physical store experience.

No restocking fees, and pretty much a no questions asked return if it's within the time window which changes depending on your reward level. I can return anything except software within 45 days of purchase and they price match Amazon.

Keep in mind that Best Buy will ban you from returns if it is a frequent thing or other factors (type of items, etc). Obviously this won't affect most people but if you tend to try things and return then don't do it with Best Buy.

http://www.businessinsider.com/best-buy-punishes-customers-f...

But apparently, so will Amazon. https://slate.com/business/2018/05/amazon-is-banning-custome...

> Walmart is cheaper on many things

Caveat: only if you need a car anyways. If you only need a car to run errands, Amazon is pretty competitive for pretty much anything except fresh groceries.

In other words if you live anywhere in the country outside of a couple of cities.

I'd put the number closer to 100. All states have at least one metro area with good enough transit, and most have either two larger metros or at least one good-sized college town.

I'm not sure which "couple of cities" you're thinking of, but I'm pretty sure I haven't lived in either of them. And even when I've owned a car, I've never used a car day-to-day.

This has not been my experience.

I live (barely) inside the city limits of a town of 13,000 people, in a county of 37,000. My wife and I both have vehicles and we use both of them probably 80% of days - and I work remotely to boot.

"A couple of" cities was not meant to mean two, but 100 sounds like too many, and even if you live in the best-served metro areas, the service is usually limited to a small portion of it.

I agree with that. There's one US city where it's completely normal and ordinary not to own a car. There are maybe a dozen others where, if you live and work in a relatively central area of the city, you can probably get by without one without too much hardship. Go much beyond that and you may be able to get off without one but a lot of things get harder and you have to compromise on your activities.

18 cities have >25% households without a car. 8-9% of households lack cars.

http://www.governing.com/gov-data/car-ownership-numbers-of-v...

Yes, much less than 100 cities. I live in the Phoenix area, and can't imagine how hard it would be without a car. It's so spread out that it isn't funny. I have a car mostly because I like driving, but still would have one if I didn't, just not the same kind of car.

I also feel like a certain number of those people are carless not by choice but because they cannot afford a car, and are putting up with a pretty extreme level of inconvenience.

I will tell you that South Dakota absolutely does not have that, and unless you're in the dorms of one of the schools and can bum a ride with someone who's already going, a car is required.

That's probably a bit of an exaggeration but I daresay that there are very few people who own a car solely to run errands today. If I need to own a car to run errands, I probably need a car for other reasons too.

What is true is that there are people who live in cities and use Zipcar, Uber, regular rentals, etc. instead of owning. If that's the case, the cost calculus changes if you need to pay in order to run errands.

It's not. The amount of places where you can get by without having your own car is pretty small in this country.

I honestly don't think anyone who doesn't live in the center of a city everyone's heard of uses a service like Zipcar, but sure, if you need to rent a car to go Walmart looks less attractive. If you need to rent a car to go you also probably don't live near a Walmart, which as far as I know has abandoned the urban concept and decided to stick with their rural/suburban box store.

There's also the fact that Walmart achieves low prices by strong arming suppliers into giving them lower quality goods masquerading as the "same" model.

Buying anything that you expect to keep more than a year is a waste at Walmart, even if its cheaper.

Just curious, do you have any links to evidence on this?

Full Disclosure: I'm a WM Associate, but am speaking on my own. This type of behavior is against our Code of Ethics, and would be sent to investigation.

Obviously, Walmart doesn't say, "give me lower quality goods". Walmart says, "give me goods for lower price than last year, or we'll cancel our order", which then pushes suppliers to cut corners for Walmart orders.

i have often heard a claim that electronics manufacturers sometimes have a "walmart" version of certain products which are made with cheaper parts but sold in almost-identical packaging to the version that they stock at other retailers. i haven't been able to find any specific examples, though, so i don't think it's true. or, at least, it isn't a common practice.

many electronics manufacturers, however, do create "black friday" versions of their products. this is well-documented. i think this practice is the origin on the claim made by the GP.

I think that's more about price matching...

BestBuy: "Sorry, but that Walmart price is actually a different TV model."

Try comparison shopping for TVs.

You'll find the following:

     LG TV Serial:ABC123WM  at walmart
     LG TV Serial:ABC123BB  at best buy

Every chain gets their own "differentiation" on the serial number. Same fucking monitor, same bells and whistles... But that "serial" is different.

It's called managerial plausible deniablity. And this tactic is very much welcomed across all stores, as it prevents comparison shopping.

> Just curious, do you have any links to evidence on this?

I THINK this is along the lines of your request. I read this when it was published (2006) and didn’t reread it when I searched for it now. Describes a culture of lowering quality to achieve sales at prices dictated by WM, as I recall. Sorry, want to be more complete but unable at this moment.

https://www.fastcompany.com/54763/man-who-said-no-wal-mart

That, and at Walmart, I rarely have to worry about counterfeit products.

yah, walmart will pre-counterfit products for you--they get the manufacturer to build a cheaper version of a mass-appeal product and slap a different sku on it and sell it at the same price as the copied product.

Not sure about cheapest, especially in walmarts core categories. Convenient is harder to measure.

https://lendedu.com/blog/walmart-vs-amazon/

http://www.businessinsider.com/walmart-vs-amazon-which-is-ch...

This. Walmart's image has been severely tarnished over the years as a result of their abusive labor practices. Now that Amazon is also acquiring that same image, it's the perfect time for Walmart to pull a PR about face.

I suppose they hope such a gesture will woo people away from Amazon and back to Walmart who cares about people, unlike Amazon.

Amazon has been doing the same thing for FC and CS workers for a few years now: https://www.amazoncareerchoice.com/home

But I haven't heard of Walmart associates having to carry around bottles to pee in because they don't have time to go to the restroom.

The yearly maximum is something like $1500 (and it's not paid up front) so it's not nearly as generous as it looks.

Bingo. Wal-mart is fudging its Huggies because it sees Amazon turning Whole Foods locations in miniature Amazon stores.

What Wal-mart currently has that Amazon doesn't is a brick-and-mortar network that works. If it can make that experience much better, it can beat Amazon in the physical space for ten years while Amazon fights the learning curve.

...in semi rural America they are still the cheapest and most convenient. We have 3, soon to be 4 Amazon fulfillment centers in the Atlanta area. We are about 20 miles outside of the closest w/ Atlanta being about 50 miles to city center. I can order paper towels and a few other weekly necessities each week and pick up on the way home from work. 1-2 years ago it was cheaper to do Amazon and Prime...now for those essentials it saves us about $2 on a $50 order vs. Amazon. We dropped Prime and just use Wal-Mart pickup now.

Because the economy has picked up and they have retention issues

They see the regulation going this way in several regions already, so they are getting out ahead of it and reaping the strategic and PR benefit.

Seems like a reasonable assumption. They dominate everything everywhere - they have to maintain this position overtime by keeping mindshare as economic and environmental issues continue to tilt into the red.

This is exactly the answer. They're getting a head start to enable future regulatory capture to further entrench themselves in existing markets as smaller players are unable to deal with shifts in minimum wage.

They were never known as the worst among the kind of people who would consider working there. It sure beats being treated just as badly at somewhere else where the employee discount is far less useful.

Because there’s suddenly a bunch of money available from the tax cuts.

Don't know why you're getting down-voted - it's a reasonable hypothesis. Why wouldn't a corporation reinvest those tax benefits?

I think that the likely culprit is a more competitive labor market in general, but there's no reason to outright reject the idea that the demand for labor could in part be driven by said tax cuts to a non-trivial extent.

I didn't downvote but jeremyt's statement is without evidence. It's certainly plausible that the statement could be correct but there really isn't any evidence given to support it.

> jeremyt's statement is without evidence

The news has been full of dozens (maybe hundreds by now) of large and small companies using the tax change to increase employee wages and benefits.

While there's currently no specific press release linking Wal-mart's actions with the tax change, it certainly isn't beyond the realm of possibility (and HN-class conclusion jumping).

I guess I read different news than you. I’ve read that most of the money is going toward stock buybacks. The pressure on wages is coming from a tighter labor market. That’s what I’ve read but I don’t know enough to say one way or the other.

https://www.marketwatch.com/story/now-we-know-where-the-tax-...

http://money.cnn.com/2018/02/09/news/companies/tax-cut-bonus...

You are correct that there have been stock buybacks, as well. But I'm not sure it counts as "most."

First, of the companies that are doing stock buybacks, not all are doing only stock buybacks. Many are doing other things as well.

Second, there's a whole great big world out there called "local news" where you'll see these stories that aren't covered by CNN, Marketwatch, CNBC, etc...

Yes, some big companies are doing stock buybacks, but there's a lot more going on in the business world than the Fortune 500.

Well from one of the articles I referenced:

This follows a report by benefits consulting firm Aon Hewitt finding that 83% of large companies don’t expect the tax cut to boost salaries at all — just help pay for small bonuses companies like WalMart WMT, +1.98% and AT&T T, +0.70% gave workers, which reporters soon discovered were, themselves, skewed toward higher-paid, longer-tenured employees in many cases.

However one feels about the issue my point still stands. Th comment that started this thread gave no supporting evidence for the claim and thus deserved to be downvoted.

Also the article we are all nominally commenting on is about Walmart which is a Fortune 500 company. Is its tuition plan because of the Trump tax cuts?

> The news has been full of dozens (maybe hundreds by now) of large and small companies using the tax change to increase employee wages and benefits.

No, there have been dozens or hundreds of companies claiming that tax cuts were responsible for employee compensation increases. Many of those were one-time bonuses, but the tax cuts are ongoing. In some cases where the benefits were ongoing (like Walmart's hourly pay increase), you'll find that they tend to coincide with the overall trend of state minimum wage increases. This is just PR: they're getting ahead of the trend and trying to attribute it to tax cuts rather than other forces.

Also, since employee compensation was tax-deductible even before the tax cut, taxes certainly weren't stopping companies from raising wages before the tax cut.

Pretty much. Companies are using the tax cuts to signal goodwill to the market, but in reality the temporary increase in benefits is an expense coming from pre-tax income.

The tax cuts are causing increased employee benefits is a red herring.

No, tax deductions are not tax credits.

Suppose the company is targeting $100 net profit, and has $200 income available, before taxes and "bonus wages".

At 20% tax rate, the company can pay $75 in deductible wages, plus ($(200-75)0.2) $25 in tax

At 10% tax rate, the company can pay $89 in deductible wages, plus ($(200-89)0.1) = $11 in tax.

Lower taxes enables higher wages.

That's not quite how it works. Publicly-traded companies don't reduce their net income using a tax cut, because their entire industry is getting the tax cut. The company's market price is tied to how their NI compares to the rest of their respective industry NI.

Stock repurchases are filed on the balance sheet, post taxes, which is why companies take the increase in net income but then use the extra cash to buy back stock. The former keeps the company competitive and the latter increases the stock price.

So, what evidence would you accept?

"The news has been full of dozens (maybe hundreds by now) of large and small companies using the tax change to increase employee wages and benefits."

Not really. There have been a lot of stories of companies offering one time bonuses to employees, despite the tax cuts being ongoing. And historically, windfalls like that have been used mainly to benefit the higher ups in the company, instead of the workers.

Lots of one-time bonuses. I haven't seen nearly as much (any?) about across the board wage increases.

And it's not like Wal-Mart was hurting for money before. They could have raised pay before. Or they could have kept the tax cut money and paid it out to owners. So I'm not convinced. The tighter labor market makes a lot more sense.

> Why wouldn't a corporation reinvest those tax benefits

Because they're historically linked to stock buybacks and M&A activity. The ROI is usually much more clear-cut.

Does anyone have evidence that a retailer of Walmart's size investing in customer service and employees nets a positive ROI?

I remember reading Howard Schultz's book "Onward" about his tenure as CEO of Starbucks, and how there was a significant return in their investments in employee education / benefits / stock incentives / better service, despite pushback from Wall Street.

Idk if you'd consider the two the same scale (the market cap for Wal-Mart is probably 3x that of Starbucks if I recall) so maybe that's _some_ evidence?

Though I agree evaluating/comparing the ROI on the two is probably not the cleanest analysis in the world.

And as the federal government works to gut healthcare, Walmart is reaping good pr by working to make up the difference.

Employee compensation (wages and benefits) is and was tax-deductible.

Yes, but so what?

A simple exercise: say you have a small business. Your tax rate is 35%, gross revenue is 200k, tax-deductible expenses are 100k (1 or _maybe_ two employees). We'll assume a C corporation, just for illustration purposes and that you care about the after-tax profit it generates. In practice for something this small you would probably just pay yourself a salary and be done with it...

Anyway, you have 100k taxable income, and 65k after-tax profit. If you paid your employees more, you would have less after-tax profit, because your tax rate is not 100%.

Now say the tax rate drops to 21% (this is the cut that happened) and you give your employees a 10% raise. Now you have 110k expenses, 90k taxable income, 71.1k after-tax profit.

So a tax cut in this situation does in fact allow an employer to both have more after-tax profit _and_ give raises to employees at the same time.

Now we can have a discussion about what government services the employees and the employer won't get as a result of the tax cut, of course. That needs to be accounted for too, in the grand scheme of things.

That 21% tax rate relies on paying employees more?

> That 21% tax rate relies on paying employees more?

I'm not sure what you're asking.

The 35 -> 21 change is the actual corporate tax rate change that happened end of last year in the US.

You don't _have_ to pay your employees more to be taxed at the 21% rate. But at the new tax rate you _can_ pay your employees more and till make more of a profit.

So in the end the whole question is where the money that would have been paid in taxes goes instead. It could be going to stock buybacks, dividends, investment in the company, raises for employees, or just sitting in the company bank account. In real life the answer is probably "all of the above" and the proportions vary.

Again, I'm not sure whether I answered your question, because I'm not sure what you're asking.

Tax deductions are not tax credits; they only provide fractional offset of taxes.

Or because there's finally a competitive labor market due to 7 or so years of declining unemployment rates.

They work together - tax cuts made the labor market even more competitive

Funny what freeing up capital to engage in a bidding war on labor when unemployment is low can do.

If you actually think Walmart is the worst employer out there then you haven’t experienced the fun of local grocery stores and other small businesses.

Regional governments have started discussing wage-shifting prevention — wherein Walmart workers must receive low-income benefits such as food stamps due to excessively low wages. By paying workers a wage sufficient to get them off of benefits, they make conversations around charging Walmart a penalty or removing local tax exemptions or etc. politically unviable.

> I wonder why they suddenly care?

You would think it a silly idea: educating people into certifications that overqualify them and likely lead to their exit to greener pastures. There is the other end of the pipe to consider: students leaving high school would see Walmart employment as a way to afford their education - providing an everlasting stream of new employees. In addition, Walmart relies on successful innovators to stock their shelves with compelling products. This is selfish positive sum reasoning[1], where doing good ironically results in more for you.

That's my best guess, at least.

[1]: https://youtu.be/rvskMHn0sqQ

You overestimate the number of people willing and able to use this program compared to the paths to promotion. A lot of people will not take advantage, and will not complete their program. Most private colleges have their pricing structure set so that most people run out of various funding programs before they even graduate (generally at 2.5-3 years in).

So, if 10% of employees start, less than 1% will finish. I think there's probably more than enough room for 1% of their employees to move up. Also, great PR form.

Excepting a single month in 2000, the US unemployment rate is at its lowest since the late 60s and the economy is booming like crazy. Walmart requires more employees than any other company, and is simultaneously also seen as, and probably is, one of the worst possible companies to work for. They're going to suffer major retention issues and end up scraping the bottom of the barrel in terms of employee quality.

I don't think it has anything to do with image. Just basic market dynamics. They need more, better, and more reliable employees. So they're offering a better value. That, or one of the Waltons has decided to get in on this sweet presidenting business and they're tossing a few bones out for 2020.

They already scrape the bottom of the barrel, as others mentioned this looks more like a way to keep those on an upward career trajectory from becoming flight risks.

Their neighborhood market stores are pretty much all self service now. Nearest one to be only has one checkout lane - the rest are self checkout. Theres drive and pickup groceries. Since they need a lot less staff they probably figure they can pay and offer a little more benefits to help improve their public image. I'd say its working too, I've been going a lot more. Their mobile pay with automatic price matching is excellent.

Worth noting the Fred Meyer nearby is also going the same direction. They just installed a ton of self checkout lanes and it seriously works well too. The store was absolutely packed this last weekend but there was hardly a wait to checkout.

It looks like an ongoing trends in that market. People started caring about people they interface with so your local (but a global) discount shop needs to jump as high as they can to cater to the compassion weak point. Bad PR is effective and this is how you fight it.

IMHO it's a step in the right direction. Corpos are soulless and people vote with money. Take your $ somewhere else and they'll try to meet the bar.

Amazon's tough love is also well-known at least from what I've read so having an upper hand over them may sway the lazy but compassionate crowd to take a ride to Walmart, not amazon.com.

I wonder how if this would have any effect on the racial makeup of their employees. Currently:

> Nearly 46% of Walmart’s 1.5 million US workers are African American.

http://changewalmart.org/issues/african-americans/

Because they need to attract rich/middle-class shoppers to their site, in their fight against Amazon.

I don't know about rich but they have seemed to hit it off in semi rural Georgia with "pickup" for groceries. We are in the grey zone for Amazon. Close to Atlanta...too far out for grocery delivery. ...and we need cars/trucks for commute, farm, school, etc. Not having to drive would significantly change the equation.

I wonder if they weren't pressured to do so after the tax bill passed. One of the big justifications for it is that companies would have more money to spend on their employees.

I wonder why they suddenly care?

Walmart's stock is up 2% so far. I think that's what they always have cared about the most.

They care because unemployment is low.

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