Watched "Walmart, The Cost of Low Prices"

[Lenny]

Originally Posted by RawAlex

Lenny, you might want to read this:

http://www.wsws.org/articles/2005/ma...gmpr-m18.shtml

In the case of GM, $1800 out of every car sold goes to paying those costs.

Most people don't realize, but when GM or a Ford closes a plant, they are often stuck paying upwards to 80% of the salary costs anyway for years to come. There is very little flexibility in the process.

GM's sales and market share have dropped massively in the last 30 years, but they are still supporting the retirement benefits and (rapidly increasing) medical costs. Just last year, they have moved from 5.2 to 5.8 BILLION dollars. That change alone would cover 25% of the losses last year. Those costs continue to spiral and they are not going to go away until GM goes bankrupt, which is a solid possiblity.

Walmart would be non-functional with $15/hour stockboys and $20/hour fork lift drivers, especially if there were shop rules and legacy retirement costs to cover in the future. The impact at the cash register would kill (see K-mart).

Pindilly, I don't think anyone here is suggesting Walmart is a good career choice. Your experience with a tough work situation combined with (often over done) right to work laws means that it sucks ass. However, the truth is there, 10-12 new people come in every week to take a swing at it. That says enough.

Alex

Alex I'm a reasonable guy, and I agree there are extremes involved on both sides of the argument.
I never said Wal-Mart should have $15 an hour stockboys. Don't inflate my position to make yours look more reasonable.

GM's problems are mostly due to their loss of market share, and that can't be blamed on the guy working the assembly line, the buck has to stop with management on that one.
(Although I do agree that things like the UAW JOBS bank are absurd)
There's also the issue of rising health care costs, which is another subject altogether that would take too long to go into here.

There is a vast array of social policies that I disagree with that cause these sorts of problems. The problem isn't just "Wal-Mart"
However, the minimum wage in this country, if it had been indexed to inflation would be around 8.50 an hour today.
Someone working full time making minimum wage only makes 2/3 of what it takes to cross the "poverty line"
What's the point in having a minimum wage if it doesn't at least keep people out of poverty?
Whenever anyone in congress brings up raising the minimum wage Wal-Mart is one of the first people in line with campaign and PAC contributions for any congressman who will oppose raising the minimum wage.
These are the sort of things that bother me. I think if a person works full time (in the richest country in the history of the world) that they should be able to feed themselves and see a doctor if they're sick. That's not too much to ask (unless you're Wal-Mart)
Raising wages and providing health insurance wouldn't hurt Wal-Mart's profitability one iota, yet they act as if it would put them into bankruptcy.

[SirMoby]

The administration would have everyone in America working for a $1 an hour if they could tax that money and make claims on Fox News of having 0% unemployment.

If you raise minimum wage then people will loose jobs. Of course they're not feeding themselves at minimum wage so it's not a big lose but it looks bad on paper. The administration can not do something if the numbers look bad.

The real thing to do would be to cut taxes on minimum wage workers which would put more money in their pockets but then we'd need to raise taxes on the richest Americans, which is something else that the administration can't do.

Walmart has done some brilliant things in cutting costs but recently they've ran out of new ideas and paying off politicians to increase thier profits. We all know that.

[RawAlex]

Lenny, the moves by the unions here in quebec would have seen hourly wages for "floor staff" increase at least 20% over the term of the contract, with major "shop rules" being put in place. It would not have been out of line to expect to see $15/hour staff stocking shelves, which just ain't gonna cut it at a discount retailer. No inflation of your position, it is what it is (the store was closed, now Walmart is being dragged in front of the labor relations board).

GM is suffering greatly from market share losses, but unlike a normal business that could easily adjust it's work force and manufacturing facilities, GM is bound be insane work rules, job counts, and legacy costs that pretty much wipe out any chance for a profit. Most of the contracts are written to maintain jobs and benefits, with few provisions for business down turns. GM is still paying for benefits granted in the 60's and 70's, long before competition came to the US market place. Yes, years of bad management and bad product have left them in a bad position, but Ford is also facing similar problems. The auto industry is one of the last big smoke stack industries that have survived in the US "as they were", but the pressure is there and something will give.

Minimum wage is a really difficult situation. If you make it too high, business cannot compete. If you make it too low, people cannot afford to live on that basic wage. A company like a WalMart of a McDonalds would not work the same way as it does if the basic wage paid got to be too high.

That you said there was a lineup of people wanting to work at Walmart new each week tells me that the job demand far outstrips the salary that is being paid. If the jobs were not acceptable, people wouldn't show up for them. It's pretty hard to arge supply and demand, even int he job market.

As for the medical issues, I think you need to look at your federal government to find out why this is a problem. Putting the weight of health care on individuals and companies is, in my mind, a major flaw of the United States, where more Americans live without health coverage than live without a car, a color TV, or a cell phone. Some things are just a little far out of whack.

Alex

Alex