Posted on 10/27/2005 6:28:19 AM PDT by Nevadan
Wal-Mart executive advocates increasing the minimum wage
Wal-Mart Stores Inc. Chief Executive H. Lee Scott Jr. called on Congress Monday to raise the country's minimum wage from $5.15 an hour, saying the company's customers are "struggling to get by."
Why doesn't the Wal-Mart chief call on Congress to dictate that the maximum price of a pair of pants shall be $5, that no carton of milk shall ever cost more than a buck, and that no piece of lawn and garden equipment shall ever be priced higher than $19.95? Those measures would surely help Wal-Mart's struggling customers to "get by," wouldn't they?
Such counterproductive meddling with the market would be no sillier than the one Mr. Scott has proposed -- in fact, Mr. Scott's publicity ploy is even less excusable than such well-meaning nonsense, usually heard after references to "a chicken in every pot" at election time -- because it comes from a presumably economically literate fellow whose stockholders and customers have both prospered by taking advantage of what remains of the once vibrant American free market.
(For the record, the Soviets tried price caps. As former Brezhnev economic advisor Yuri Maltsev reports, the result was that, "Chicken never cost more than 50 kopecks, but unfortunately there was never any chicken." A maximum price for a carton of milk would only result in the need to buy dozens of smaller cartons, and a $19.95 lawnmower would probably last about as long as it took to wind it up, just as "minimum wage" hikes tend to start inflationary spirals that leave everyone pretty much where they were before, except that each individual dollar in their pay and pension checks is now worth far less.)
The public relations aspects of this call from Wal-Mart -- a firm smarting from ongoing union criticism -- are obvious.
"There is some pretty serious posturing going on here," comments Jared Bernstein, senior economist at the Economic Policy Institute, who himself would like to see even more entry-level jobs outlawed. "One can't help but think if they want people to have more money, how about paying your workers more?"
Indeed, Wal-Mart is free to set an example by hiking its wages as high as it likes. In fact, the company reports all its workers already start above the minimum wage, and that full-time workers -- about three-fourths of the Wal-Mart work force -- are paid an average of $9.68 an hour, far above any proposed new minimum.
That means any minimum wage hike would likely hurt Wal-Mart competitors more than Wal-Mart itself, which moves Mr. Scott's proposal into the category of "protectionism."
Fortunately, The Washington Post reports that several of the initiatives proposed by Mr. Scott to his directors and executives Monday "were met with skepticism."
DOH!
WalMart has undermined it's own customer base by shifting to offshore suppliers.
Rather than mandating a minimum wage for everybody, the proper way to remedy this condition is to levy a 10~15% tariff on all imported goods.
Price caps are an infantile way to deal with the free market, but are the absolute best way to guarantee a shortage. Works every time it's tried!
This move (raising the minimum wage) would hurt the McDonalds and Subway types of businesses that pay less
than Wal-Mart. Does Lee Scott want burgers and subs cost
more.
Welcome the the new Gilded Age. In the "Ownership society" they forgot to tell us who was going to own who.
Reminds me of an old joke that my Father-in-Law used to tell:
"Mrs. Smith goes shopping at her favorite meat market and complains to the butcher about the price of the sirloin roasts. She exclaimed that the $6.00/pound (price greatly raised to reflect today's inflation) was outrageous since the market a few blocks away was only charging $4.50/pound!
The butcher replied, well why don't you just go buy it there? Mrs. Smith said, well they don't have anymore for sale. The butcher then said, well if I didn't have any to sell I would only be charging $4.00/pound!"
Not just a joke. It was actually a wagon advertised by Sav-On drugs in Bakersfield about a week before Christmas and I was standing by the manager at Skaggs drugs (which was directly across the street). A woman wanted him to sell her the wagon for Sav-On's sale price. He asked her why she didn't go across the street and buy it and she said that they were out of them. He told her that just as soon as he ran out of them, he would match their sale price.
Probbaly to make up for the consumers they are losing.
Hahahahahahahahahahahahahahahahahahahah.........
WalMart sells more in a minute, than most stores sell in a year... and they increase every minute.
Don't shop there, if you don't want to...
I'm heading there in a little while! Spot needs Iams, and I need some Breyers, milk and eggs... and Spot just asked for some more Ol' Roy treats... I guess he's worth $5!
That means any minimum wage hike would likely hurt Wal-Mart competitors more than Wal-Mart itself
How can this be when we've been told over and over again by the anti-Wal-Mart populist here that Wal-Mart pays the lowest possible wages and forces their employees into government assistance programs?
This proposal is unfortunate at best, but after years of bashing by the liberal media, lawyers, labor unions, environmentalists, anti-growth activists and anti-capitalists, I fully understand why Scott is trying to appease the haters.
This is an effort in futility - just like trying to appease the anti-Wal-Mart crowd at FR.
New England Dairy Compact.
You must be kidding. 100 million Americans shop at Wal-Mart every week. Maybe you missed their announcement on Tuesday that they plan to open 550-600 stores next year. That means 60 million additional square feet of retail space including 270-280 new super centers.
Does that sound like a business that's losing customers?
Please name a company that sells the same type merchandise as WMT and gets it's supply domestically.
You're talking sense here :)
Personally I think it was a silly position to take - but I have to laugh about all the WM bashers comeing out of the woodwork and attacking everything WM, instead of discussing the possible reasons he would come up with this foolishness..........
Kinda funny. In Alaska, the minimum wage is 7.15/hr by law.
FWIW, the McDonalds sandwich you can buy in Las Vegas for $.99 cost either $1.99 or $2.99 depending on the season.
I suspect the difference in Min wage has little impact as most the folks who get paid that are part-timers, at least locally.
FWIW, the McDonalds sandwich you can buy in Las Vegas for $.99 cost either $1.99 or $2.99 depending on the season
But we don't get oil royalties in the lower 48.
If they've undermined their customer base by shifting to offshore suppliers, how is it they continue to grow faster than their competitors and the retail industry as a whole? Using off shore suppliers has nothing to do with their customer base other than saving them money, so they can get more out of their hard earned dollars, and helping to keep inflation low.
Last year Wal-Mart made purchases of about $220 billion. Of that, only about $18 billion came from China. That's about 8.2% of their total purchases. Last year Wal-Mart purchased $150 billion from American suppliers. That's about 68% of their total purchases. Don't rely on the anti-capitalists here for facts. They don't like them.
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