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Comment by SketchySeaBeast | Hacker News Reader

I was watching a sitcom called Superstore a little while ago, features the employees in a Wal-Mart like store, and the protagonist got a promotion to the head of the store. There was a whole plot line about how her wage was now in the 6 figures, and I was incredulous until I did a bit of research - Wal-Mart store managers can absolutely make that much money while their employees live in poverty.

How you could make that much and expect loyalty and sacrifice from your staff who make a fraction of that, I won't ever know.

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Supposes employer A chooses to pay their employees more than other employers. Employer B chooses to pay their employees less. Both employers are selling products or services that the purchaser finds the same, i.e. they have no preference for who they buy it from.

Employer B takes the money they save by paying employees less, and invests in newer, better facilities or R&D or whatever. Now employer B is selling a better product than employer A. Who will customers choose to purchase from? Who will lose business, and end up having to fire employees?

To be a successful business, compensation decisions can't be based on people's feelings. You have to consider when a new store or hotel or restaurant will come around and put them out of business, and stay ahead of the curve. You pay what you need to to get the job done. There are some good examples like Costco, but there are only so many people with sufficient disposable income who can afford to shop at Costco and similar stores, and they're not competing with Walmart/CVS/Dollar Store or other bottom tier vendors.

But employer B also can now remove employees due to the investments they made in automation - if they can remove the workers entirely they'll have even more money to invest in making a better product to edge out employer A. At the end of the day the worker always loses.

> At the end of the day the worker always loses.

Rise up comrades, and shake off the bourgeoisie! /s

That’s a bit oversimplified. Automation doesn’t fix everything, it may not be a useful option regardless of how much money you just saved.

It’s more likely the best employees will move towards the company that pays more, along with their experience and know how, probably producing a better product. On one side you’ll have the best people and on the other side you’ll have ones that may be good but also very upset about the disparity.

I would still question if saving on personnel brings the most benefit in most cases. It’s short term benefit, enough for an executive to get the bonus. It may also be long term if everyone is doing it so an employee has no option.

Sounds like a great argument to increase the federal minimum wage so everyone is forced to pay their employees more.

Great idea.

Until you realize that no level on minimum wage is adequate in SF, while $10/hr is livable in rural Arkansas.

It's not a silver bullet even with COL factored in. Higher staff costs? Replace them with automation. You can see the largest employers of minimum wage employees (eg. Mcdonalds) hedging against a rising minimum wage with kiosks to replace cashiers. At $15/hr for labor, those capital investments start looking like a mighty fine ROI.

The cost of technology falls much faster than wages rise.

Wages currently are responsible for about 4% of the cost of the burger. https://www.purdue.edu/newsroom/releases/2015/Q3/study-raisi...

So you're saying that by increasing the cost of the burger by ~5% some of their employees could double their salaries? That's great!

Yep.

Cashiers helping one customer at a time are a bottleneck in a fast food restaurant. It's not that those jobs are eliminated, food still needs to be cooked and served. Kiosks allow up to 2, 3, 4 times the number of customers to order food at the same time (this also includes food delivery services who can order remotely). Kiosks are just the last part of efficiency that fast food restaurants have been developing over the last 50 years.

Increasingly surprised how we need all these various ipads/terminals in businesses. Seems by now technology should be able to push something to the customer's phone when they walk into the store and have them complete their order on their phone without having to install apps.

One interesting result of that is it becomes more viable to look for strategies that eliminate the employees altogether, eg the food-ordering terminals that are going up everywhere, as the relative cost diminishes with wage increase.

In such situations, it becomes an irreversible effect, as the cost to transition was mainly up front.

One interesting question: is the tipping point for switching to automation in the range of the minimum wage? Does increasing wages move you across that tipping point, or is it cheaper to get rid of employees no matter what the minimum wage is?

The existence of minimum wage at all enforces the property — you can otherwise just keep lowering pay until its not worth replacement (eg india can get away with paying very low wages, so the threat of automatic replacement isn’t nearly as high).

So the real question is: at what point does minimum wage draw automation as a response?

And that of course depends on the economics of automation at any given point in time — if a human isn’t drawing enough value (compared to the cheaper alternative), then the only rational thing is to replace the job entirely.

But minimum wage is also independent of automation (or any other alternative) costs, which is why its a bit of a hamfisted solution — it ignores the possibility that human labor simply isn’t worth that much. So you get this awkward line where everyone above the line is better off, and everyone below the line is homeless — the line being how much value you can produce.

Using India again as an example, that line doesn’t really exist — you have a fluid scale of wealth, where the bottom-most aren’t jobless (we can always produce enough work, if the price is right; you don’t want a daily maid?), but they barely make anything, and they live a lifestyle that we as a first-world country would deem unacceptable, but they find acceptable (especially compared to the alternative — no job/money at all).

Notably the poor indian probably lives better than the poor american, because the economy of the poor is significantly more developed. Partly because there are so many poor people in india, and partly because their income is allowed to be so much more fluid.

So there’s also the additional question of whether minimum wage “starves out” the poor economy, compounding how bad life can be at the bottommost rungs of our society

They also have a caste society where racism is okay. But in America, everyone is supposed to be considered equal.

India is also a place where if you were to have 10 children and 6 of them survived, that’s good odds. In America, if you have 10 children and 1 dies, that’s a tragedy.

Source: I lived there for a few months.

...how is any of that relevant to anything under discussion, beyond the keyword “india”?

India, and every other third world country, has their (many) problems, but nonetheless, the economy of those living on a dime is far superior to whatever exists in the US.

Minimum wage, as all regulation does, strangles such poor economies (there must be an official term for this; anyone know it?) by virtue of creating a hard line where things simply cease to exist, be it half-functional cars, drugs, housing, wage, etc. Anyone above the line is better off (all options are now guaranteed to be at least decent), and anyone below simply has no options.

Whether we really want this depends on the context and subjects (drugs, banks are high-return targets for regulation; cars and wage perhaps less so), but that regulation deletes a market, by-design, should always be a part of the consideration, though it rarely seems to be.

Because if I had responded to everything you had said, I would have had to have written an essay.

About 100 years ago, minimum wage used to be a socialist concept. Now, all parties in America support the minimum wage. The only debate is whether it should go up or stay the same. Your view on minimum wage and absolute deregulation is so radical that only the anarchist party is likely to share your views. I swear, some people just want to see the world burn.

The economics term you are searching for is probably a “deadweight loss”. In theory, when a $1/pack tax is introduced on cigarettes, there is a decrease in the volume of cigarettes packs sold. That volume reduction numeric value is the deadweight loss. In practice, cigarettes are an “inelastic” good and nicotine addicts keep buying packs to support their nicotine addiction even when the price goes up by a dollar. Thus, the deadweight loss on cigarettes is much lower than with usual goods.

Regulation does not delete a market. Just because we have printed nutrition facts and safety checks on almost all of our foods does not mean people have stopped selling food and people have stopped buying food. Just because drivers must stop at stop signs doesn’t mean people have stopped driving. Just because banks are required to only safeguard 10% or more of their account holder’s balance doesn’t mean banks are unprofitable and have ceased to exist. These all just mean the equilibrium has shifted in some amount in some direction and the market has established a new equilibrium.

>Because if I had responded to everything you had said, I would have had to have written an essay.

As far as I can tell, you seem to have instead opted to respond to nothing I said, in the previous post...

>Your view on minimum wage and absolute deregulation is so radical that only the anarchist party is likely to share your views.

Is it really..? It seemed like an obvious thing to me: creating a glass floor traps people underneath it, but (ideally) makes life better for those above it. Glass ceilings are trivially accepted — and ceiling is just a floor to the guy above it. Is it so radical to apply it where the people above aren’t in the top 10%?

Also I’m not arguing absolute deregulation — I’m arguing that regulation inherently removes a subset of the market, and this should be accounted for. It might be worth it, it might not be. But its certainly not without consequence.

That, and that the extremely poor can live a better and more complete lifestyle in other countries than whats found in the US.

>The economics term you are searching for is probably a “deadweight loss”. In theory, when a $1/pack tax is introduced on cigarettes, there is a decrease in the volume of cigarettes packs sold

This doesn’t seem to be exactly what I’m getting at; I’m trying to refer to the idea that, when certain quality controls are globally enforced, the base cost goes up, and those who relied on lower costs can no longer be served. These barriers always existed — there’s a minimum cost to doing anything, really — but that hard-line bar has been raised. And that means the chunk of market that once existed inbetween the previous minimum and the new minimum... vanishes.

>Just because banks are required to only safeguard 10% or more of their account holder’s balance doesn’t mean banks are unprofitable and have ceased to exist.

I’m not suggesting it would remove the entire market of a given domain (I mean, regulation can, but usually doesn’t, and doesn’t strive to) but rather, it removes certain previously available options for banks which perhaps reached a sector that is now no longer served. That is, some people were not well off enough to afford such a safegaurd; the equilibrium shifts, along with the bare minimum required to enroll. Where previously “shithole” banks could serve that population, now a void exists (perhaps replaced by something worse, or better, or nothing at all).

But banks that cheat are probably globally good to regulate out of existence. Banks that safegaurd 10% vs 12% perhaps less obvious. But if 12% drives up the cost significantly, then some group of people are being pushed out.

Loan sharks don’t find borrowers because of a wealth of viable alternatives... they’re all thats left when you’ve exhausted all better options. The higher the minimum bar, the more likely someone ends up in such a state.

Which is generally fine. Because that is going to happen one day anyway. You want people to be paid well because then the transition becomes gradual. The most unproductive businesses and positions disappear first. People getting paid just over living expenses is the worst case scenario, because then everyone gets replaced over night as automation becomes cheap enough.

Those terminals were going to happen anyway.

In economic theory, this is what’s known as an efficiency wage. If you pay more, there’s more competition for your openings and you attract a better class of employee.

As other comments have pointed out, simply raising the minimum wage doesn’t accomplish the same thing. Instead, all those people who were marginal at $7-8/hour simply don’t get hired, and employers use automation or forego the opportunities that additional labor offers.

If your business is only viable when paying people below what they need to live, then your business shouldn't exist. The fact that you can do that now is simply people in power exploiting the weak.

Effectively what is happening is that those without power are subsidising the business by supplying them labour below cost. Generally in economics, making a business only viable through subsidies is a bad thing. It is much more efficient to give that labour to better businesses.

> Effectively what is happening is that those without power are subsidising the business by supplying them labour below cost.

How do you define "cost"?

The 'cost' of labour is the income required for such labor to maintain itself.

I.e. living costs + healthcare costs + groceries & other expenses + a little saving.

This is the base cost of a person, and thus the base cost of labour.

You're just pushing the bubble around under the wallpaper: who defines "living costs" etc? A person can technically stay alive in extremely spartan conditions.

To provide a slight counter example: 1. Employee A produces 20 widgets an hour 2. Employee B produces 100 widgets an hour

There is a wage where employee A costs more than the value they create. By mandating a wage that is higher than their productivity they are simply not hired, they do not get a chance to gain experience/knowledge, they loose the chance to be as productive as Employee B.

The result is they are now on welfare/unemployed/etc. They lose the chance to get on the employment ladder.

In general people improve so we you shouldn't be making the low wages for long. But what do we do about people who don't improve - either we push them out of the workforce or we subsidize their lifestyle to meet a minimum threshold.

> The result is they are now on welfare/unemployed/etc. They lose the chance to get on the employment ladder. > In general people improve so we you shouldn't be making the low wages for long. But what do we do about people who don't improve - either we push them out of the workforce or we subsidize their lifestyle to meet a minimum threshold.

That's only assuming that the ladder is just that, and not a single rung. Time spent in most minimum wage jobs are hard to sell as giving you a leg up when moving into the higher professional strata.

The first sentence is the "how do we want society to work" and it is the right one.

Businesses are a thing we've invented to shuffle resources around; there's currently enough resources for everyone in the world to be fat and happy (the world produces 3,500 calories per capita per day), it's just so very unequally distributed that 1 in 10 working Americans faces food insecurity, and 1 in 8 Americans overall lives in poverty.

Anyone working a full-time job should be able to live comfortably, and if you can't work full-time, society should take care of you anyway.

For your second paragraph, that is a bit more complicated than simple economic theory might say.

For one thing, someone has to cook the fries, sweep the back room, and help customers. Unless you invent insanely cheap and powerful automation or raise the wage to a point that it's uneconomic to open a new store (and please take the employers who say "if you raise the minimum wage, I'm going to take my marbles and go home" with a grain of salt), it's hard to actually get rid of minimum wage jobs.

For another, remember that you will be injecting money into a sector of the economy that tends to spend it immediately. Minimum wage workers are likely to buy more fries and day care, causing more demand for other low-wage jobs.

But that’s exactly what happens. A marginally profitable store becomes an unprofitable store and shuts down. Fewer stores serving the same customers more efficiently are able to afford paying the remaining employees the new prevailing wage.

There’s a lot of slack in how many customers per hour a team can serve in a fast food restaurant. Look at In N Out burger at lunch time versus the average Wendy’s.

You can pay an experienced team 2x to serve 5x as many meals. But you’ll need 1/5th as many restaurants.

True, but Employer-B now has employees who DGAF about anything in the business, and often have an adversarial, even 'eff them! attitude to the business.

Employer-B's customer service and general care of its facilities & inventory will suck, and they will have much higher turnover costs, even if they have better products.

So, what is the relative advantage?

Moreover, the article was specifically about the tradeoff in executive pay vs low-end pay, and how a small sacrifice at the top made huge differences both for the low-level employees and for profits overall

For some reason in these scenarios the workers, who literally construct the product, are always framed as the adversary, and a sunk cost that needs to be avoided if at all possible. Workers are keeping the business from being as successful as it could be by being a monetary drain on the business instead of, in fact, being the business.

Labor costs are the biggest, if not one of the biggest costs for any employer, and it happens to be one the employer can sort of control.

Again, I’m not making anyone a hero or adversary, I’m just pointing out that some businesses can’t survive unless they compete on price, and that means lowering their own costs. It’s quite a blessing to be able to work in a high margin business.

There’s a reason Walmart and Dollar General are crushing others, and it’s because either their customers can’t afford good customer service or they don’t care for it and choose to shop there anyway. The proof is literally the fact that mom and pop stores and others like Sears went out of business, customers preferred saving $5 over good customer service.

As I prefaced above, this is true for business where customers aren’t differentiating between vendors except on price.

Yes but what he’s saying is that if you take that money from high executive pay then you can offer both. You have three variables rather then just two, most businesses ignore the executive pay. That’s where the example breaks down. Now if you want to keep executive pay high then yes a lot of people select price over service and you are correct. But those aren’t the only two variables then it’s a lot more variable. Pardon the pun.

The grocery business is, and has been for a very long time, a low margin business. You’re not going to get phenomenal service at any grocery store.

That said, anecdotally, I do the grocery shopping and prefer WalMart. The produce is better, there’s a larger selection, and I can get the odd household item while out for groceries without paying an extortionate price. I’m saving at least 10% on my grocery bill without even trying. Hell, Walmart even does free curbside pickup where the other grocery chain wants to charge me.

Don't know about Dollar General, but isn't Walmart successful because they're big enough to dictate terms to their suppliers and simply squash their smaller competition with convenience?

They started small at some point, and there are many factors contributing to their ability to offer the lowest price.

Most DG are out in more ruralish areas where there's simply less choice, and/or the cost of exercising that choice is more pronounced. Drive an extra 15-20 min to save 30c on milk? Probably not worth it to many folks (cost of gas is more, might make you late for work, etc).

Had a lot of discussions with the former manager of our local DG, and... while not 'eye-opening', it was interesting to hear the pressure she was under. $x/week budget to schedule all the staff, targets to be hit (dollar targets, merchandising display targets, etc). It's "retail", but the numbers she had to play with were pretty low given the volume, imo. FWICT, she wasn't on more than perhaps the equivalent of around $13/hr, although I do think there were small performance bonuses thrown in. But, I think she was 'salaried', so lots of 50-60 hour weeks for probably not much more than ~$35k?

This is a somewhat ruralish area, and this was also... 4 years ago? She's moved on since then, and we lost touch so I don't know if things have changed much with the newer managers or not.

FWIW, she did keep that store ticking over. She was a bit bristly at times with other staff, but ... there was a pretty noticeable decline in staff behaviour, sheving, cleanliness and overall experience at the store within a couple weeks of her leaving, and it's never quite recovered. I'm guessing had they paid her an extra $100/week she'd have stayed and continued going above and beyond, but... .hey... profits...

Enormous selection, and economies of scale (massive purchasing & warehousing ops reducing costs, lower cost/sqft of store area, etc.) are also reasons that Walmart, Dollar General, etc. can out-compete local stores.

It is not only lower labor costs. And they are clearly willing to spend on the appearance of customer service, paying 'extra' people to be greeters, etc.

Viewing it as if the people who produce your products and services are a mere cost instead of an asset is stupid.

And, just because a lot of "successful" finance types implement this view, dies not mean that they are also not stupid.

Oversimplifying is not a solution to most problems.

I have had no better customer service at Mom and Pops than at Walmart, maybe it is just my area.

People are willing to put up with shitty service to save a couple of bucks. Not everyone, but almost everyone. People prove it time again. See the success of no frills airlines like Ryanair and Spirit.

Amazon is a pretty good example of people willing to pay more for being able to return anything for almost any reason. There’s more comfort behind the click so more people buy noticeably more.

I still prefer Southwest over Spirit and any other airline but i’m just one anecdote.

> To be a successful business, compensation decisions can't be based on people's feelings

Great, good point, so let's base it on what's equitable and humane instead. People aren't mad because their feelings are hurt, they're mad because they can't make ends meet or prepare for the future.

In Norma Rae, the main heroine is promoted to a supervisor (with a higher salary) in order to alienate her from others and suppress her pro-union stance. I suspect a similar dynamics can also happen in Walmart.

>promoted to a supervisor... in order to alienate her from others and suppress her pro-union stance

That sounds like a great way to encourage pro-union stances...

Also core to the main plot of "Sorry to Bother You".

> Employer B takes the money they save by paying employees less, and invests in newer, better facilities or R&D or whatever.

In practice, Employer B takes the money and pays Employer B (ie the senior staff) with it.

Considering there is new development happening all the time, clearly there must be some funds leftover.

Labor market is a market, too.

Who will lose business unable to hire enough employees?

Unemployment rate in US is very low at the moment, well under 4%. Last time it was this way in 1970.

There are several metrics for unemployment. One of them is around 4%.

https://www.bls.gov/news.release/empsit.t15.htm

... And the last time that one was this low was 1970. There’s no arguing the US has been absolutely crushing it in terms of jobs creation for several years now.

Maybe there shouldn't be "bottom tier" vendors at all if their existence means pushing and exploiting an inequitable standard of living.

But that's only one of the possible scenarios.

A different one is that employees leave Employer B for Employer A (or others). So Employer B makes more money per employee, but he has less of them now.

Employees under employer B would quit and work for employer A instead.

Employer A can’t hire infinite number of employees.

> There was a whole plot line about how her wage was now in the 6 figures, and I was incredulous until I did a bit of research - Wal-Mart store managers can absolutely make that much money while their employees live in poverty.

The problem is fundamentally this: A typical Wal-Mart store has around 300 employees. If you take the manager's entire $100,000 and distribute it to the employees, they each get less than $500/year, a raise of less than $0.25/hour.

Meanwhile you're never going to get a good manager for the price of a stock clerk, because it's skilled vs. unskilled labor. But you still need a manager.

And nice as it would be to pay all 300 employees $100K/year, that would immediately bankrupt the store. Moreover, it would be more than the amount it would cost to automate most of those jobs.

This is not a problem with glib or moralistic solutions. And the solutions that do exist are probably more along the lines of making housing cost less so lower income people can afford it, rather than chastising the employers who actually employ unskilled workers.

> And nice as it would be to pay all 300 employees $100K/year, that would immediately bankrupt the store

I don't think everyone necessarily expects $100k/employee. But many (most?) of them work for 30-35 hours per week - not out of choice, but because their schedule is controlled by the management. And they've generally been paid at or under $10/h. In the last few years there's been moves to increase that, but even moving from full time (which not everyone gets) at $10/hr to, say, $14/hr... That's $28k? Loaded cost with taxes and stuff might be ... $35k? $40k? Maybe? That's still a far cry from "we can't afford to pay everyone $100k". Sure, you can't, but that doesn't explicitly justify paying most people $9/h part time when they want full time (and the store has a need for full time staff, they just don't want to have to provide X benefits that come with full time).

> In the last few years there's been moves to increase that, but even moving from full time (which not everyone gets) at $10/hr to, say, $14/hr... That's $28k? Loaded cost with taxes and stuff might be ... $35k? $40k? Maybe? That's still a far cry from "we can't afford to pay everyone $100k".

Sure, but that's the point. Should the manager not get $100K just because there is no way the employees could? What if that's what it takes to get a good manager?

And even at the numbers you're suggesting, multiplied by hundreds of employees, turns into millions of dollars a year. That's more than the store's entire profit. And it's also still above the threshold where it becomes profitable to automate many of those jobs.

> Sure, you can't, but that doesn't explicitly justify paying most people $9/h part time when they want full time (and the store has a need for full time staff, they just don't want to have to provide X benefits that come with full time).

But whose fault is that? Employers generally shouldn't provide any "benefits" -- they originally came about as a tax dodge at a time when non-monetary benefits weren't considered taxable income to the employee, and that's still the primary reason they exist. Company cars disappeared when they became taxable income, employer-provided health insurance didn't because it's still a tax deduction. But in every case the employees would be better off with the equivalent in cash and the only reason they don't have it is dumb laws.

It's even worse for low income employees because the rules keep trying to "help them" by giving employers huge incentives to cut their hours.

And yet there are stores like Costco which do pay their employees quite comfortable wages and manage not to immediately bankrupt themselves. How is this so?

Different business models. Walmart sells a 10 oz box, Costco sells a 100 oz box using the same number of employees which allows them to pay each employee more. They employ fewer people per quantity of goods sold.

Walmart could sell 100 oz boxes, but then they wouldn't have the same customers. People who don't have the cabinet space or the money to buy everything in bulk couldn't shop there anymore. Then some other discount store selling in smaller quantities would spring up to serve those customers and they'd be the ones who couldn't pay higher wages.

Redistributing Walmart's store managers wealth is a really poor example when you don't even look at executive salaries or dividends.

> The problem is fundamentally this: A typical Wal-Mart store has around 300 employees. If you take the manager's entire $100,000 and distribute it to the employees, they each get less than $500/year, a raise of less than $0.25/hour.

Walmart has 2,867,125,000 shares outstanding * $1.96 per quarter * 4 = $22,478,260,000 per year spent on dividends alone. If you take all that money and give it to the 2.1 million employees listed that comes to $10,703 a year in additional wages alone. I haven't even looked at executive salaries or the costs from lawsuits Walmart gets from it's shady tactics. Or that many employees are part time and the per hour wage increase would be much higher than it indicates.

> And nice as it would be to pay all 300 employees $100K/year, that would immediately bankrupt the store. Moreover, it would be more than the amount it would cost to automate most of those jobs.

No one is asking Walmart to pay a bagger 100k a year. Most people are asking a decent wage for where they live. For most places that is $15 an hour... $30k a year. In California that is more. If Walmart can't pay that then maybe they deserve to fail and Costco, which does pay well and comply with the law, can take their place.

Compared to Microsoft or Apple, which can easily afford to pay the contract labor they use in place of union janitors, technicians, drivers, etc. Despite their margins they still use it and those people live in poverty because of it.

Walmart overall is a poor example as they push lower costs at every level including using dubious or illegal tactics. Certain property tax strategies, pressuring employees to work on unrecorded hours, pushing manufacturers to low cost sweat shops overseas.

These costs don't show up in people's wages, the products they buy, or a company's 10-k. They show up in the quality of life in our towns, the unemployment rate, and the budgets of our governments. Microsoft, Apple, Wall Street banks, even McDonalds is a better example. (McDonalds operating margin is 42% compared to Walmart's 3.34%. Source: MSN Money.)

> Walmart has 2,867,125,000 shares outstanding * $1.96 per quarter * 4 = $22,478,260,000 per year spent on dividends alone.

Where did you get those dividend values? According to this [0], annual dividend was $2,08 per share for fiscal year 2019.

[0] - https://news.walmart.com/2019/02/19/walmart-raises-annual-di...

You are right. Misread MSN Money. Google Finance by default shows quarterly, but G Finance is terrible now. MSN Money by default shows annual.

> Walmart has 2,867,125,000 shares outstanding * $1.96 per quarter * 4 = $22,478,260,000 per year spent on dividends alone.

Their quarterly dividend is ~$0.53/share:

https://stock.walmart.com/investors/stock-information/divide...

Moreover, let's suppose you take that entire amount and give it to the employees. Then the company has zero ROI and the stock value drops to the level that it's profitable for corporate raiders to buy the company to liquidate its real estate holdings etc., and everyone loses their jobs.

Shareholders get paid because they invested money. You can't avoid paying them market rates unless you can operate without capital. Somebody has to pay for the land the store sits on and the trucks that deliver the goods. They have to get a return if you want to get an investment.

> I haven't even looked at executive salaries or the costs from lawsuits Walmart gets from it's shady tactics.

The numbers for top level executives will be even less valuable than for store managers, because they get paid hundreds of times more money but have ten thousand times more employees under them.

> If Walmart can't pay that then maybe they deserve to fail and Costco, which does pay well and comply with the law, can take their place.

Costco can't replace Walmart because Walmart customers can't afford membership fees and bulk purchases, or they would already buy at Costco. The thing that replaces Walmart is dollar stores. That is not an improvement for anybody.

> Compared to Microsoft or Apple, which can easily afford to pay the contract labor they use in place of union janitors, technicians, drivers, etc. Despite their margins they still use it and those people live in poverty because of it.

Those people live in poverty because the cost of necessities is high compared to the value of unskilled labor. If janitors at other companies make $8/hour, Microsoft isn't going to pay more just because they have more money.

To improve the lives of those people, what you need is either more demand for labor or more supply (i.e. lower prices) for necessities.

> Microsoft, Apple, Wall Street banks, even McDonalds is a better example.

None of these companies are good examples because they're all titans. The large majority of people work for small and medium businesses with low margins. Setting policy based on Apple and McDonalds is exactly how you get policies that only work for Apple and McDonalds. You destroy the small businesses that actually employ people and drive the demand for labor while you increase corporate profits and consumer prices from the lack of competition.

Forget about punishing Walmart and McDonalds. Figure out how to make it easier for the family owned corner store to better compete with them. Figure out how to reduce housing and education costs.

I am guessing they don’t expect loyalty but rather desperation and the need to pay bills. Use the person until they move on and get a new one. I make about 9$ an hour above minimum wage and I can not even fathom how a person on minimum wage survives.

That may be the pragmatic assumption, but I've worked my fair share of low paying jobs, and there's a ton of talk of being part of the team.

There's a difference between what leadership will say publicly & what they really mean. Reading between the lines of retail manager's inspiring speeches will reveal that their personal careers are directly affected by the store's bottom line, and they're certainly not going to explicitly acknowledge their employees' desperation as a motivational tool.

>How you could make that much and expect loyalty and sacrifice from your staff who make a fraction of that, I won't ever know.

All those Walmart store managers make 6 figures as you say, some as much as $250k, but the one thing they can always fall back on is they all started out as a low paid Walmart employee as well.

It doesn’t change the inequality dynamics but it’s better than something like this story of the healthcare execs making $300k+ bonuses compared to their minimum wage coworkers, where the execs never started out making min wage with the company...or consider the horror story’s of those certain tech companies who don’t even treat low wage employees as regular workers and encourage regular high wage workers not to socialize with the low wage workers.

I didn't know that Walmart store managers were that well paid. And to be certain, they pay a lot more than 7.25/hr to their lowest paid employees!

I would focus on dividends and executive salaries over store manager's pay. Executives want store managers to be loyal to control theft.

Why do you think anyone expects “loyalty and sacrifice” for minimum wage at Walmart!

sacrifice? c’mon

They will always ask you to work harder, put on more responsibilities, maybe stay a little late after you clock out to tidy up, always.

You’re fine up until that labor violation at the end there. The state will quickly fine them for that, and any manager worth $100k knows better than to ask it.

Well, most managers at any pay scale definitely act like they don't know better.

Walmarts min pay is a lot higher than min wage in most states.

How much would you expect a person to make who manages and is responsible for the entire operations of a store with revenues in the tens of millions of dollars?

And who perhaps spent 5-10 years learning and developing those skills by rising up the ranks in that company.

Economics is amoral. It doesn't know good from evil. The biggest mistake on the right is thinking that capitalism is Good. The biggest mistake on the left is thinking that capitalism is Evil. It just is. It's like thermodynamics. If you get burned by a hot stove, it doesn't mean physics is evil. And it doesn't mean getting burned is just your imagination, either.

Without intelligence guiding them, such systems can easily destroy themselves with feedback loops. Power differentials etc, in an amoral environment, lead to low-level employees getting screwed and owners/upper management getting rich. This feedback loop can eventually destroy a company, or a society.

So what I find hard to understand isn't that employees go along with this system that screws them (they need to eat, y'know?), but rather that they think it's good, that it's what's best for everyone, that maximized profits will be equitably distributed. We have an angry, populist working class that has completely accepted the systematic inequalities of neoliberal-flavored capitalism, and the socialist welfare-state hacks that come with it mostly to keep the whole thing from self-destructing this year at least. They're mad they're getting screwed, but think their bosses are completely right to screw them.

It's really hard to grok that.

> Economics is amoral

Such a thing does not exist. It is the study of exchange between individuals, any model that brings down morality to 0 will not be useful, practical or a applicable.

There is a reason why the most iconic political economists were all philosophers!

When you buy something from Amazon, is it an exchange between individuals? When you get a paycheck from a corporate employer, is it an exchange between individuals? No, that makes no sense. It's an exchange between an individual and an abstract legal/financial entity that engages in economic activity, but is in no rational way a human being. And what about B2B exchange? Clearly, it's economics, but when Wal-Mart buys a wholesale lot of shampoo from Proctor & Gamble, it is absurd to think of that as "between individuals".

> When you buy something from Amazon, is it an exchange between individuals?

Yes. You exchange your labor, divided into an unseen number of customers for another one's labor, divided into an unseen number of customers.

Remove individual interactions and see everything disappear. Its the building block of society.

Ok, even if you take humans as the motivating agent... how does it become a moral act? How is an exchange of money for goods/services an inherent good, or an inherent evil for that matter?

Is it done under coercion? Is the exchange forbidden, or punished? Is the exchange harming an innocent third party? Is the exchange guaranteed by a third party? etc.

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