God Bless Wal*Mart

[twiley]

 

 

Sorry, really bored at work today.

Edited December 13, 2005 by twiley

[alexgaddis]

Sorry, really bored at work today.

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[Clubfoothead]

The average Wal-Mart customer earns $35,000 a year, compared with $50,000 at Target and $74,000 at Costco.

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We don't have Costco here that I'm aware of. Hotter chicks than at Target?

[Codwagon]

We don't have Costco here that I'm aware of.  Hotter chicks than at Target?

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There are none in Dallas proper. Two in Plano that I know of.

 

Target is still the best on the HotMeter.

 

Last time I was Costco, I was one of the few people that spoke English (no offense intended to anyone reading this that doesn't speak English).

[Perchoutofwater]

Costco pays its average employee $16 an hour, Wal-Mart sits there at $9.68.

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Beau, you are smarter than this. You can not compare Wal-Mart wages to Cosco wages, that is just stupid, and I think I've pointed this out to you once before. If you want to make an accurate comparison, then you would need to compare the wages of those Wal-Mart employees that work at Sam's Wholesale Club to the Cosco employees. You are comparing a retailer to a warehouse store. Of course Cosco's average employee will make more than Walmart's average employee, because equipment operators that stock shelves with fork lifts cost a whole lot more than the guy that barely knows english stocking a shelf with a step ladder.

 

Wal-mart as weigies article shows is better than most retailers, and no doubt that is partly due to it's warehouse division. More than likely they pay and offer the same benifits in their retail stores as other large retailers, and pay the same in their warehouse stores as other warehouse stores. If they didn't people wouldn't work for them.

 

As long as there are help wanted ads in my local paper, I'm not going to worry about the guy working at Wal-mart. Like someone else said, if you don't like what they offer, get another job. If you don't like what they sell, go somewhere else.

 

With regard to insurance, the insurance they offer is cheaper than the insurance my wife gets through the school where she teaches, so that is a bit of a disingenuous argument as far as I'm concerned. What do you pay for your employees insurane? I'm willing to bet it is more than $200 per month. If you didn't pay for it, wouldn't you offer them a larger salary?

 

I tend to agree with West Virginia on this, people don't have insurance primarilly because they do not prioritize correctly. They'd rather have their two packs a day, a couple of six packs on the weekend, and have a guaghty ring with a zillion dimond flakes on every finger of their old lady than pay for insurance, well that is their decisions. I have compassion for those that truely can not help themselves, but for the most part those are a very few.

[Clubfoothead]

I tend to agree with West Virginia on this, people don't have insurance primarilly because they do not prioritize correctly.  They'd rather have their two packs a day, a couple of six packs on the weekend, and have a guaghty ring with a zillion dimond flakes on every finger of their old lady than pay for insurance, well that is their decisions.  I have compassion for those that truely can not help themselves, but for the most part those are a very few.

 

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That's what I say every time tank wants a f'n voucher so his kids can slum-down my daughter's private school.

[Beaumont]

Kind of funny that you chose to highlight the fact that the average Wal-Mart employee makes the same wage as what you pay your admin. asst.

 

Don't tell her/him about Costco wages or you might have to pull an employee over from Wally World for that whopping $0.32 raise. 

 

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My average employee makes over $50k a year ...

[Beaumont]

Perch -

 

I have never been to a Costco in my life, I assume it is like a Sam's ... we have never had a conversation about it. The roundtable discussion I quoted above was lumpiong all large retailers (employ over 1,000 people) together:

 

"In terms of job-based health coverage, you see about 53% coverage rate for large retailers, and it’s about 48% for Wal-Mart. One of the things that characterizes Wal-Mart’s plan is that they’re a lot less comprehensive than other retailers. If you look at Wal-Mart’s own tax filings, it actually pays 59% of healthcare costs for its workers and dependents. The number for retail overall is 77% for individual and 68% for families. Wal-Mart is providing less money on health care than other retailers. If you adjust for all that, the health costs per hour of work gap is about 37%. The evidence is pretty clear that there’s a large gap in health care."

[Perchoutofwater]

That's what I say every time tank wants a f'n voucher so his kids can slum-down my daughter's private school.

 

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Screw vouchers, and screw the government paying for school. People would value thier education more, and parents would ride their kids harder if they were paying for it instead of the government paying for it.

[Beaumont]

Mallaby, Tierney offered misleading Wal-Mart defense

 

In his November 28 Washington Post column, Sebastian Mallaby offered a misleading defense of Wal-Mart Stores Inc.'s controversial employee health care policies, writing that the 5 percent of Wal-Mart workers receiving Medicaid -- government-funded medical assistance for the poor -- is "a typical level for large retail firms." In a similar November 29 New York Times column, John Tierney responded to criticism that some of Wal-Mart's employees "rely on Medicaid for health care and on other government aid" by pointing out that "so do some employees at other companies or at government institutions like public schools." Neither columnist informed readers that, according to researchers at the University of California-Berkeley's Labor Center, the percentage of children of Wal-Mart employees who are on Medicaid or the State Children's Health Insurance Program (SCHIP), or who are uninsured, is significantly greater than the percentage for all large retailers.

 

From Mallaby's November 28 Washington Post column:

 

Wal-Mart's critics also paint the company as a parasite on taxpayers, because 5 percent of its workers are on Medicaid. Actually that's a typical level for large retail firms, and the national average for all firms is 4 percent. Moreover, it's ironic that Wal-Mart's enemies, who are mainly progressives, should even raise this issue. In the 1990s progressives argued loudly for the reform that allowed poor Americans to keep Medicaid benefits even if they had a job. Now that this policy is helping workers at Wal-Mart, progressives shouldn't blame the company. Besides, many progressives favor a national health system. In other words, they attack Wal-Mart for having 5 percent of its workers receive health care courtesy of taxpayers when the policy that they support would increase that share to 100 percent.

 

From Tierney's November 29 New York Times column:

 

Wal-Mart is often denounced for getting ''corporate welfare'' because some of its employees rely on Medicaid for health care and on other government aid. But so do some employees at other companies or at government institutions like public schools. Wal-Mart offers health benefits that are generally comparable to what other retailers offer.

 

Both Mallaby and Tierney cited New York University visiting scholar Jason Furman's November 14 paper, "Wal-Mart: A Progressive Success Story," as the source for their columns. Indeed, Furman noted that "n total, 5 percent of Wal-Mart employees are on Medicaid, which is similar to the percentage for other large retailers and is comparable to the national average of 4 percent." Furman's source for this comparison was an internal memo written by M. Susan Chambers, Wal-Mart's executive vice president for benefits. The New York Times reported on Chambers's memo in an October 26 article. But Furman, Mallaby, and Tierney all failed to reveal that in that same paragraph of the Chambers memo, Chambers acknowledged that children of Wal-Mart employees receive Medicaid or SCHIP at a significantly higher rate than the national employer average.

 

From Chambers's memo:

 

We also have a significant number of Associates [employees] and their children who receive health insurance through public-assistance programs. Five percent of our Associates are on Medicaid compared to an average for national employers of 4 percent. Twenty-seven percent of Associates' children are on such programs, compared to a national average of 22 percent (Exhibit 5). In total, 46 percent of Associates' children are either on Medicaid or are uninsured.

 

In a supporting exhibit, Chambers's memo claims that 36 percent of all retail employees' children are on Medicaid or SCHIP -- a figure that exceeds Wal-Mart's 27 percent. However, an October 26 paper by researchers at UC-Berkeley's Labor Center presents a very different conclusion. Using data from the 2005 Current Population Survey, the UC-Berkeley researchers "analyzed the difference between Wal-Mart's reported numbers and those for large retailers in general (defined as those with 1,000 or more workers)." They found that "22% of children of employees of large retailers are enrolled in Medicaid/SCHIP, compared to 27% reported by Wal-Mart for their employees' children." In contrast to Wal-Mart's claim, the UC-Berkeley researchers reported that only 22.7 percent of children of all retail employees are enrolled in Medicaid or SCHIP. Additionally, they noted that the gap between Wal-Mart and other large retailers grew even larger when they examined the percentage of employees' children who are either on Medicaid/SCHIP or uninsured:

 

We also find that 7% of the children of employees of large retailers are uninsured, compared to 19% reported by Wal-Mart. While 46% of the children of Wal-Mart workers are either uninsured or on Medicaid/SCHIP, the comparable figure for children of all large retail workers is 29%. Wal-Mart workers are less likely than workers in all large retail to have job based coverage (48% compared to 54%). Wal-Mart workers' enrollment in Medicaid nationally is similar to large retail as a whole.

 

As Media Matters for America has noted, a previous UC-Berkeley report, published August 2, 2004, "found that... families of Wal-Mart workers in California relied on public health insurance programs and other means-tested welfare programs at a far greater rate than families of all large retail employees." In their October 26 paper, the researchers stated that Chambers's memo "provides data from Wal-Mart that validates the basic findings of that UC Berkeley report."

 

Among the report's findings are the following:

 

* The families of Wal-Mart employees in California utilize an estimated 40 percent more in taxpayer-funded health care than the average for families of all large retail employees.

 

* The families of Wal-Mart employees use an estimated 38 percent more in other (non-health care) public assistance programs (such as food stamps, Earned Income Tax Credit, subsidized school lunches, and subsidized housing) than the average for families of all large retail employees.

 

Tierney's claim that Wal-Mart "offers health benefits that are generally comparable to what other retailers offer" is also misleading.

 

While Furman did assert in his paper that "Wal-Mart's health benefits are similar to or better than benefits at comparable employers," he based his claim largely on the fact that the percentage of workers covered by Wal-Mart's plan -- as well as the deductibles and employer/employee cost-sharing -- is in line with retail industry averages. He further pointed out that, unlike most retailers, Wal-Mart's health plan has no lifetime maximum benefit and is available to part-time workers. He provided no examination of the quality of Wal-Mart's plan when compared with those of other large retailers.

 

Yet Wal-Mart apparently uses a number of tactics to cut its own benefits costs, at the expense of its employees, that comparable businesses do not use. Citing estimates by Mercer Human Resources Consulting, a September 30, 2003, Wall Street Journal article reported that in 2002, Wal-Mart spent 30 percent less on health benefits per covered employee than the rest of the "wholesale/retail industry" and 40 percent less than the average U.S. company.

 

From the September 30, 2003, Wall Street Journal article by Bernard Wysocki Jr. and Ann Zimmerman:

 

Wal-Mart Stores Inc. is famous for cutting costs everywhere it can. Today a giant target for the world's biggest retailer is the health-care costs of its employees.

 

Wal-Mart makes new hourly workers wait six months to sign up for its benefits plan and doesn't cover retirees at all. Its deductibles range as high as $1,000, triple the norm. It refuses to pay for flu shots, eye exams, child vaccinations, chiropractic services and numerous other treatments allowed by many other companies. In many cases, it won't pay for treatment of pre-existing conditions in the first year of coverage.

 

The payoff: Last year, average spending on health benefits for each of the company's roughly 500,000 covered employees was $3,500, almost 40% less than the average for all U.S. corporations and 30% less than the rest of the wholesale/retail industry, according to estimates by Mercer Human Resource Consulting, a unit of Marsh & McLennan Cos.

 

In addition, according to the Kaiser Family foundation's Employer Health Benefits 2005 Annual Survey, the average retail industry waiting period for health coverage is three months. Wal-Mart's six-month waiting period is double the retail industry average -- a fact that Furman acknowledged but Tierney did not.

[Perchoutofwater]

Perch -

 

I have never been to a Costco in my life, I assume it is like a Sam's ... we have never had a conversation about it.  The roundtable discussion I quoted above was lumpiong all large retailers (employ over 1,000 people) together:

 

"In terms of job-based health coverage, you see about 53% coverage rate for large retailers, and it’s about 48% for Wal-Mart. One of the things that characterizes Wal-Mart’s plan is that they’re a lot less comprehensive than other retailers. If you look at Wal-Mart’s own tax filings, it actually pays 59% of healthcare costs for its workers and dependents. The number for retail overall is 77% for individual and 68% for families. Wal-Mart is providing less money on health care than other retailers. If you adjust for all that, the health costs per hour of work gap is about 37%. The evidence is pretty clear that there’s a large gap in health care."

 

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That is contrary to what wiegie put up, so I don't know what to believe as both of you though at times misguieded seem to be pretty honest guys. Regardless though, it doesn't change the fact that it is each persons responsibility to make sure they have insurance for themselves, whether that be getting a job that provides coverage, or buying it themselves. As long as people can pay for direct tv, cigarettes, booze, and everything they buy on the home shopping network, I don't feel sorry for them for not having insurance. Maybe if 3 out of 4 houses in the local projects didn't have a direct tv or dish network dish hanging on them I wouldn't be so calous.

[Guest Cherni]

Who the hell shops at Wal-Mart?  I have been in one meybe 3 times in my entire life and I am by no means rich.

 

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In some areas of the country Wal Mart is the ONLY place to shop. They move in, offer sick prices and the mom and pop business close down. Then the people are forced to shop there whether they like it or not.

[Beaumont]

That is contrary to what wiegie put up, so I don't know what to believe as both of you though at times misguieded seem to be pretty honest guys.

 

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I'm blushing. Seriously, neither one is wrong, the devil's in the details ... Furman was looking at coverage of employees only (not dependents) and was not making a qualitative analysis of the insurance provided, therefore the difference ...

[Perchoutofwater]

Beaumont, you've sold me! I will never step foot in a Walmart again. I actually went over thanksgiving to pick up a wooden boat paddle to stir the jambalya with because the old one broke, and Walmart was the only place around that was open that had them. From here on out I, Perchoutofwater, do solemnly swear that I shall never step foot in a Walmart store again. Now I need to go and ask my broker about buying some Walmart stock.

[Beaumont]

Beaumont, you've sold me!  I will never step foot in a Walmart again.  I actually went over thanksgiving to pick up a wooden boat paddle to stir the jambalya with because the old one broke, and Walmart was the only place around that was open that had them.  From here on out I, Perchoutofwater, do solemnly swear that I shall never step foot in a Walmart store again.  Now I need to go and ask my broker about buying some Walmart stock.

 

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Wize-ass ... how about just agreeing with me that it would be nice if Wal-Mart offered comparable benefits to the jobs it is replacing instead of engaging in a race to the bottom ...

 

[Perchoutofwater]

Wize-ass ... how about just agreeing with me that it would be nice if Wal-Mart offered comparable benefits to the jobs it is replacing instead of engaging in a race to the bottom ...

 

 

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If it doesn't significantly decrease the value of the stock which many of those working at Walmart have, and it does not significantly increase the cost of the goods, which most of the people that work there purchase, then I guess it would be nice if they offered comparable benifits. Of corse it would be nice if my construction company had the kind of profits that Beck and Austin Commercial had too

[Codwagon]

My average employee makes over $50k a year ...

 

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My bad. I thought we were talking about the little people.

[Azazello1313]

i'm not really seeing what the gripe is. we used to have laws that said you couldn't be on medicaid if you got a job. that was dumb, because it created a disincentive to work, and we changed it so that people who got low-paying jobs could work a low-paying job without having to suddenly find a way to pay for their own health insurance. sounds like a good law to me, promote work, help poor people. now all of a sudden it's corporate welfare?

 

would the country be better off if wal-mart was less successful, had higher prices, and created half as many jobs but at a higher wage with better benefits? it's hard for me to see it. more unemployment, higher inflationary pressures.

[Azazello1313]

here's a pretty interesting article, that hits on both sides of the argument.

 

I recently found myself asking a fairly bizarre economic question: Would the disaffected youth torching cars in France be happier if they could get jobs at Wal-Mart? If you think I'm kidding, I'm not.

 

France and the United States have two distinct "flavors" of capitalism. The U.S. has the more "Wild West" version. Our economy is relatively unregulated compared to a place like France. We promise our citizens fewer benefits than the French. We offer our workers and firms less protection. Our government meddles less in how businesses operate and our overall tax burden is significantly lower.

 

 

The French have the more coddling flavor of capitalism. Citizens receive more benefits from the state, such as guaranteed health care. Workers have far more expansive benefits: Longer maternity leave and vacations, higher minimum pay, and the government has capped the workweek at 35 hours. Perhaps most significant, French workers have extraordinary job protection. Once hired, they're hard to get rid of.

 

The Good News -- and the Bad

 

Which brings me back to Wal-Mart and the French riots. Rarely have the strengths and weaknesses of these two flavors of capitalism been on such stark display.

 

Last month on the U.S. side of the Atlantic, Wal-Mart sponsored a series of academic papers evaluating how its business practices affect the broader economy. The results were not surprising, but the scale of the numbers was.

 

The good news: Wal-Mart does not merely save consumers money. It's also responsible for pushing down consumer prices in America by 3.1 percent. The bad news: Much of the savings comes from paying employees as little as possible. Wal-Mart alone is responsible for driving down American wages by 2.2 percent.

 

On the net, that's still good for consumers. Since Wal-Mart has driven down prices more than wages, real disposable income -- the purchasing power of what's in the average person's wallet -- is up .9 percent. Still, that doesn't leave Wal-Mart looking warm and fuzzy.

 

 

Wal-Mart and McJobs 

 

It gets worse. One of the truly surprising findings from the academic papers is that each Wal-Mart employee is associated with nearly $900 a year in added state spending on Medicaid. It's not clear what's more pathetic -- that many Wal-Mart employees don't get health insurance or that they earn so little that they are eligible for Medicaid, a government program designed to serve the indigent.

 

In short, Wal-Mart is built on what the French (and plenty of Americans) have labeled derisively as "McJobs," skimpy versions of the real thing. Couldn't Wal-Mart, the largest private sector employer in the world's richest economy, afford to do a little better by its workers? Shouldn't the government require it?

 

 

Before we shame Wal-Mart, let's remember what we recently saw on the other side of the Atlantic  where angry French youths took to the streets setting fire to perfectly good Peugeots and Citroens. The protests obviously had much to do with France's poor job of integrating generations of immigrants into French society, but they were also rooted in pocketbook issues. The French unemployment rate lingers around 10 percent -- roughly twice the American rate. In the epicenter of the rioting -- the suburban ghettos of government housing projects -- the unemployment rate is 30 percent or higher.

 

The French have effectively banned McJobs by requiring employers to be more generous. The unfortunate result is not middle class comfort for all. Often, it's no jobs.

 

 

Companies That Can't Fire Don't Hire 

 

The reason has to do with an economic concept called "marginal product of labor", which is a fancy way of saying that firms will not voluntarily pay you more than you're worth. If Wal-Mart believes that you add $5.15 an hour to the bottom line by stocking shelves, and you demand $8, the manager will politely point to the exit. If you don't have any skills that are worth more than $5.15 an hour to some other employer, you won't use that exit. You'll take what Wal-Mart is offering. McJobs tend to pay workers what they're worth, which, sad though it may be, is not always a living wage.

 

The French alternative -- admittedly oversimplified -- is to require that firms pay low-skilled workers more, whether their productivity justifies it or not. If an employee adds $5.15 an hour worth of value to a firm, the government might require the firm to pay him $10. As you can imagine, firms are not keen on paying someone $10 an hour for $5.15 worth of work, not even in France. The best business decision in that case is to hire no one at all.

 

 

French policies compound the problem by making it hard to get rid of workers once they're hired. The result, to stick with the retailing theme of the column, is like a department store that doesn't allow returns. True, no merchandise will come back. But consumers will be much more cautious about what they buy in the first place. Overall sales may well be lower.

 

 

So it is with employees. Firms that can't fire don't hire.

 

 

That is the nettlesome trade-off: The French flavor of capitalism is really bad at creating jobs, leading to high unemployment and a sense of alienation among those on the outside of the job market looking in. The U.S. flavor is better at creating jobs, albeit without guaranteeing that those who get them will earn enough to support themselves, let alone a family.

 

 

Uncle Sam Makes Up the Difference

 

So what do we do if we aspire to put people to work and provide a living wage? Economists actually have an answer for that. The key is to use government money to supplement the incomes of full-time, low-wage workers. In the U.S., that is exactly what the Earned Income Tax Credit (EITC) does, and it's arguably one of the most significant innovations in social policy of the past half century.

 

The most important thing about the EITC is what it doesn't do. In short, it doesn't make the mistakes that the French have made. The EITC does not raise the cost of labor to the point that employers would prefer nothing at all. Nor does it offer generous benefits to those who are not working, because that diminishes the incentive for them to look for work or to take a job.

 

 

Instead, the EITC uses government funds to supplement the McSalaries. The better you want to treat workers, the more government money you have to spend. It's not perfect, and it's not cheap, but it is an elegant way to work around the trade-off between making workers better off and making them too expensive for the labor market.

 

 

As for the question posed at the outset, I don't know if France's disaffected youth would be happier working at Wal-Mart. I do know -- based on new academic evidence -- that they would find a lot of really cheap stuff to burn.

 

[wiegie]

Beaumont, would you be willing to swap one of your average employees for an average Wal*Mart employee?

[H8tank]

They move in, offer sick prices and the mom and pop business close down. Then the people are forced to shop there whether they like it or not.

 

Wrong. Try again. We have a super center here, went in 5 years ago in a grass yard by itself on the side of town. Now, you can't find a spare patch of grass, there are small business all over the place, the Walmart drew them in, everything from golf pro shops to fancy resturants.

 

tend to pay workers what they're worth, which, sad though it may be, is not always a living wage.

 

 

How could any self proclaimed American have a problem with this? I'll take our way over the french way ANY DAY.

 

Who works minimum wage? Weetodds and 16 year olds.

[Beaumont]

My bad. I thought we were talking about the little people.

 

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Your words. I make sure to take care of my employees, many of whom do not have any education post high school. Wal-Mart should do the same.

[Beaumont]

Beaumont, would you be willing to swap one of your average employees for an average Wal*Mart employee?

 

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I am not sure what that is, other than a stab at my poor grammar ...

 

Some of my employees worked retail before I hired them (runners, secretaries, receptionists, etc.) ... so the answer is, sure.

Edited December 14, 2005 by Beaumont

[wiegie]

I am not sure what that is, other than a stab at my poor grammar ...

 

Some of my employees worked retail before I hired them (runners, secretaries, receptionists, etc.) ... so the answer is, sure.

 

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uh, in response to the comment that you barely pay your receptionist more than what an average Wal-Mart worker earns, you said you paid your average worker $50,000--I'd like to know if you'd be willing to hire an average Wal-Mart worker and pay them $50,000?

 

To get to the point--perhaps Wal-Mart workers earn low wages because their marginal productivity is low. Perhaps we should be happy that Wal-Mart gives jobs to these people whom other people obviously aren't willing to hire at higher wages. (This is sort of the point that Az's article gets at.)

[Codwagon]

Your words.  I make sure to take care of my employees, many of whom do not have any education post high school.  Wal-Mart should do the same.

 

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Just giving you a hard time. I would imagine your employees are much happier with you.

 

And I can't remember the last time I went into a Wal-Mart. I'll take the convenience of not parking a half mile out and ease of check-out over lower prices any day.