> but there are also costs, like wage depression.
Do you have a source for this? The conventional wisdom is that larger firms are more productive, and tend to pay more as a result.
Do you have a source for this? The conventional wisdom is that larger firms are more productive, and tend to pay more as a result.
larger firms are more productive through a variety of mechanisms, not least of which is pricing power in the labor market. economies of scale and scope (like process standardization and automation) is a primary reason firms are more productive, and also has the added effect of putting downward pressure on labor costs.
That aside, I'm sorry but you're just wrong about this. The data is pretty unequivocal: larger firms have more scope for investments in process, technology, and tools that lets them operate more efficiently. In the example of Wal-Mart, they run an ultra-efficient supply chain that minimizes breakage, makes sure popular goods are available for purchase, etc.
Whereas half the time when I go into a non-chain grocery, they're out of, or otherwise not stocking the thing I want, they're closed, the item isn't in the right place on the shelf, it's hidden in the "back room", a supplier is late, or there's some other problem. Sure, some of this is due to bargaining power, but Wal-Mart also operates at a scale where they can afford to invest billions in sophisticated merchandising systems. As software people, we should understand what a difference this stuff makes to business.
Small firms pay worse because they simply don't make as much, given the same level of sales, as large firms do. The argument is a complete strawman. Lower, less-efficient firms don't have the gross profits (price - cost of goods sold) to be able to afford higher wages, even if they wanted to.
Because Wal-Mart has the profits to be able to afford to pay full time workers a living wage, but instead of paying a living wage to all full time employees they scoop the profits, and shift that gap to taxpayers.
I think most people agree, that if an employer has the profits to pay full time employees enough so they employees are not eligible for food stamps the employer has that obligation. Where the profits exist, businesses should be required to reimburse the government/tax payers for at least the cost of food stamps. Why should tax payers subsidize the food for employees, and their families, of public companies when the profits exist? The worst part is Wal-Mart publicly claims they can’t afford to pay their employees a living wage to the extent they won’t be eligible for food stamps...well it’s simple math walmart profits less the total amount of benefits the employees take...wow the money is there.
I'm not so sure that most people agree. (For example, I do not.) It seems that if most people agreed, we might be closer to a world where it was policy or law (another form of conditional minimum wage, perhaps).
If we lived in a democracy...we live in a Constitutional Republic, the will of the people is often ignored. Another example might be marijuana legalization, where polls clearly show a majority of people want the federal laws changed, yet here we are.
Curious how you arrive at the conclusion tax payers should have the obligation to subsidize food for the employees of publicly traded companies, where the companies have the profits to keep said employees off taxpayer funded welfare.
Sure if the profits aren’t there I understand, it’s probably better the employees eat, keep their jobs and the company stays in business...but when the profits are there?
If they pay too little, they don't get enough workers. If they pay enough, they do. Long-term profitability / cash flow / available capital/debt all affect the corporations ability to continue to pay wages, so in that sense they set a ceiling.
In terms of the government assistance, that is largely unrelated to the employer(s). There is a government program that determines person X is eligible for assistance and person X takes advantage of that program. It is not required that corporations pay an amount such that person X becomes ineligible for the program. For all I know, the eligibility rules take into account family size, student loans, health situation, alimony, or any number of other factors that are literally not the business nor concern of the employer.
An employer hires a worker to do a job. They pay that worker, after which point, the sides are square. The fact that a worker is or is not eligible for that program represents a subsidy to that citizen. If the company fired them or they quit, they'd still be eligible for that subsidy (in most cases). It's the decision of society to support its members, and I don't accept the translation to "it's a subsidy of the employer" as being a lossless one.
Enacting rules to ensure that companies need to pay more for employees who are on/near welfare or other government programs will likely have a negative effect on hiring those very workers, most of whom are presumably in a fairly precarious situation economically.
Do you want Walmart hiring Biff and Muffy, who are not on assistance because of their family situation, rather than hiring Joe and Mary, who are each single parents trying to earn money to lead their kids out of poverty?
Walmart bears direct responsibility for these laws, they lobby for and write them.
Food stamps, renamed SNAP, is a $70+B a year program and 20% is spent at Walmart.
Walmart public statement:
“Our business operations are subject to numerous risks, factors, and uncertainties, domestically and internationally, which are outside our control. These factors include... changes in the amount of payments made under the Supplemental Nutrition Assistance Plan and other public assistance plans, [and] changes in the eligibility requirements of public assistance plans.”
If the concern of a sub-thread is Walmart lobbying for self-serving programs for general consumers, I agree with that as a concern, but it's no damn different than the epi-pen people arguing to stock epi-pens in schools by policy, the AED manufacturers campaigning to have AEDs installed all around, etc. I thought this sub-thread was concerned with Walmart employees being on government support programs and that being Walmart's problem to alleviate.
Kroger's ability to achieve sales, earnings and cash flow goals may be affected by: labor negotiations or disputes; changes in the types and numbers of businesses that compete with Kroger; pricing and promotional activities of existing and new competitors, including non-traditional competitors, and the aggressiveness of that competition; Kroger's response to these actions; the state of the economy, including interest rates, the inflationary and deflationary trends in certain commodities, and the unemployment rate; the effect that fuel costs have on consumer spending; volatility of fuel margins; changes in government-funded benefit programs; manufacturing commodity costs; diesel fuel costs related to Kroger's logistics operations; trends in consumer spending; the extent to which Kroger's customers exercise caution in their purchasing in response to economic conditions; the uncertain pace of economic growth; changes in inflation or deflation in product and operating costs; stock repurchases; Kroger's ability to retain pharmacy sales from third party payors; consolidation in the healthcare industry, including pharmacy benefit managers; Kroger's ability to negotiate modifications to multi-employer pension plans; natural disasters or adverse weather conditions; the potential costs and risks associated with potential cyber-attacks or data security breaches; the success of Kroger's future growth plans; the ability to execute on Restock Kroger; and the successful integration of merged companies and new partnerships. Kroger's ability to achieve sales and earnings goals may also be affected by Kroger's ability to manage the factors identified above. Kroger's ability to execute its financial strategy may be affected by its ability to generate cash flow.
I don't buy the concept of "living wage" but that's not even what's at issue. I just think it's folly to blame Wal-Mart employees for availing themselves of a legally available social benefit program.
I don't care where a person is politically. The private sector's job is profit maximization, not social welfare. There's this growing school of thought in the US that thinks it's the private sector's duty to "Take care of people". I'm not sure how we got it into our head that that should be the responsibility of private businesses. We have a government for that. It seems absolutely bonkers to start messing with the fundamental machinery of corporate law if the goal is social welfare. It's like seeing the thermostat is broken in the house, so we take a wrench to the engine of the car. It makes no sense to me whatsoever.
"I'm not sure how we got it into our head that that should be the responsibility of private businesses."
Well, why do you believe that it's our duty to subsidize labor costs for Wal-Mart?
"It's like seeing the thermostat is broken in the house, so we take a wrench to the engine of the car. It makes no sense to me whatsoever."
I'm sorry, but I absolutely cannot agree with any basis for that comparison. Why is it bonkers to tell a company, "Hey, make sure you're paying your full time employees enough so that the government does not have to pick up the slack." Especially one so big and profitable as Wal-Mart. Wal-Mart has exactly no excuse whatsoever to not pay their employees enough to not need food stamps.
I don't believe in singling out Amazon, Walmart, or <pick a company> as being "too profitable" and thus justifying that they, and not all companies, must pay a higher minimum wage.
How can one not single out Walmart when more Walmart employees get food stamps than any other company, walmart directly receives $14B in revenue of this taxpayer money, and Walmart lobbies to keep these laws in place (and writes them).
The average joe minimum wage worker doesn’t have a level playing field and is less likely to successfully lobby the government to up minimum wage as Walmart is successful in lobbying to increase SNAP benefits in a given year.
It’s not a minimum wage issue it’s that Walmart is the beneficiary of taxpayer money ($14B/year) not to mention the indirect benefit of taxpayers having to subsidize the Walmart workforce (which other companies don’t necessarily receive period)
I don't think it's "counter intuitive" to single out a specific business for targeted policy; I rather more simply think that it's "wrong".
Individuals and businesses/groups ought not be targeted by governments for differential policy treatment, IMO. That's an improper use/abuse of power.
Would you like to run a business in an environment where the government is free to single you out for differentially hostile treatment?
No one talked about that but you. You know that is not what we're talking about; we're talking about the shitty wages WalMart pays, which requires you and I to subsidize their labor costs.
"Or employing them to make them less bored, more purposeful, and to have more money than if they were unemployed?"
This is a complete non-sequitor. They are subsidizing their labor costs by not paying enough, and requiring their employees to turn to public assistance. That is shitty, and pure evil, as is anyone apologizing for that practice.
"Would you like to run a business in an environment where the government is free to single you out for differentially hostile treatment?"
I wouldn't run a business in that manner, and so I honestly do not give a flying fuck about the feelings of any business owner that would be upset at that. As far as I'm concerned, those people deserve to have their business and money confiscated from them in order to repay society for what we've had to do for them.
Uh, this post (about 5 up-thread and not by me) talks about/seems to complain about the money Walmart receives for selling food to SNAP recipients:
It's a form of labor cost externalization that directly undermines a worker's purchasing power.
It would seem to me the growing school of thought is it’s the taxpayers duty to “take care of corporations”.
It’s not the taxpayers job to buy Wal-Mart employees and their families food.
How can you conclude that an employer paying its employees enough so the don’t qualify for food stamps is “social welfare”? Food stamps in and of themselves are social welfare, the fact the employees qualify become corporate welfare.
Because that means that Wal-Mart is not paying their employees enough, which means that you and I have to subsidize them. I don't know about you, but it angers me quite a bit that one of the largest and most profitable companies in the country cannot pay its employees enough to be able to eat.
"This is really the fault of poorly-written policy."
How? How is not entirely the fault of the company that has complete control over how much they pay their employees?
"It blows my mind why people blame Wal-Mart and not the folks who developed the legislation of those policies."
Because Wal-Mart is entirely responsible for how much they pay their employees.