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Congressional Democrats released a study on Thursday that suggests Walmart likely costs taxpayers millions of dollars a year because their wages are so low, many of their workers must rely on food stamps and other government safety net programs.

The study was based on one Walmart Supercenter in Wisconsin, assumes most workers take advantage of the public assistance for which they qualify, and estimated a maximum cost of $900,000 in total public assistance.

Realistically speaking, the total amount likely comes for below this figure. However, once you figure in the total number of Walmarts in the country, and other stores that rely on many low-wage employees, it adds up to tens of thousands of families affected, and likely millions of dollars in government aid, with taxpayers picking up the tab.

This is not to knock the government safety nets themselves; this is what they are designed to do and workers have every right to apply for the programs for which they qualify. However, it does not change the fact that ideally, we want as few people on these programs as possible, and at the very worst, while low wage workers are just scraping by, Walmart executives are still reaping tons of money out of the business.

The government should be helping out people cover the basic necessities to live, but not padding the Waltons' wallets in the process.

Just like the Democrat's study says, Walmart's low-wage policies are a drag on our economy.

If the minimum wage were raised, less Walmart employees would be relying on less public assistance.

One of the major arguments against raising minimum wages is that it results in high prices for the consumers. Walmart would raise its prices to offset the additional wages it has to pay it's employees, right? And the higher prices is bad for the economy, goes the argument.

There's far more analysis that goes into this debate, and I would be in over my head if I tried to break it all down. But there's one aspect that I think often gets lost by both sides of the debate.

What they tend to ignore is that Walmart's prices are already so low that smaller stores are unable to compete. It's true that the cost of wages is a factor on prices, but so is competition, or the lack thereof. If anything is found to be the stronger factor on prices, in the real world, it always comes down to competition.

If Walmart is forced to raise its prices, other stores will be able to compete better. As the competition to Walmart increases, so will the pressure to keep prices low. If people loved a free market as much as they claim to, they would be in favor of the policies that would keep competition strong, not stifle it.

The minimum wage needs to be raised to levels that allow families to cover their basic necessities of life, maybe even afford to sleep soundly. In the real world, the perceived costs that people argue go with raising the minimum wage rarely live up to the actual costs that go with keeping an unliveably low minimum wage.

To the employees, to the customers, and to us, the average taxpayer.

Help change Walmart, and you help our entire country.

Aubretia Edick, a Massachusetts woman who earns $11.70 an hour and receives public assistance, food stamps, Section 8 housing, and state-funded health care, said her reliance on the safety net is one reason she plans to join the strikes. “Walmart doesn't pay my salary,” she said. “You pay my salary.”

5:42 PM PT: Holy smokes, thanks for the Rescue and Repubs, all.

Originally posted to The Progressive Atheist on Sat Jun 01, 2013 at 08:14 AM PDT.

Also republished by Hunger in America, Invisible People, In Support of Labor and Unions, and Community Spotlight.

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Comment Preferences

  •  magic! (9+ / 0-)
    If Walmart is forced to raise its prices, other stores will be able to compete better. As the competition to Walmart increases, so will the pressure to keep prices low.
    so prices will go down by going up.  Amazing.
      •  pierre - I favor raising the minimum wage (6+ / 1-)
        Recommended by:
        Kickemout, nextstep, Sparhawk, Roadbed Guy, erratic, Bailey2001
        Hidden by:
        eXtina

        but the logic of this report escapes me. If Walmart employees had the opportunity to have a job with higher pay and benefits I would assume they would have taken those jobs. If the alternative to a Walmart job is being unemployed would all the taxpayers, and social safety net programs, be better off if these people were not working at Walmart and were unemployed?

        "let's talk about that"

        by VClib on Sat Jun 01, 2013 at 10:50:07 AM PDT

        [ Parent ]

        •  your 'logic' is sickening nt (5+ / 0-)

          "I'm sculpting now. Landscapes mostly." ~ Yogi Bear

          by eXtina on Sat Jun 01, 2013 at 11:06:43 AM PDT

          [ Parent ]

          •  eXtina - where I went to graduate school (6+ / 0-)

            they would expect you to challenge such broad assumptions such as the notion that by employing people at minimum wage Walmart is actually a net cost to society. I don't know, maybe Walmart is a net cost to society. I have never seen the data that looks at all the cost/benefit analysis. Isn't the underlying public policy question would all parties be better off if the employees didn't work at Walmart? Isn't that a valid comparison of the alternatives?

            The HR is really out of line for asking a reasonable question.

            "let's talk about that"

            by VClib on Sat Jun 01, 2013 at 04:33:13 PM PDT

            [ Parent ]

            •  The better way of looking at it is simple (0+ / 0-)

              The millions of dollars of costs to to  taxpayer  are subsidies to Wal-Marts bottom line. Going down the road a bit more, if Wal-Mart didn't exist then other retailers , far smaller, would fill in the gap. Chances of wages going up to $13-$14 an hour is much better.

              If Wal Mart's business model is built around paying the lowest wages possible and least amount of benefits it seems that any change in the law would force Walmart to change or to go under if they tried to make costs even out by a mix of forced productivity and prices going up.

              WalMart has always depended on Critical Mass in buying power. If less people shopped because of higher prices, then they become another supplier. Too many businesses are wrapped around wal-mart because of low margins. They need to diversify.

              The fact the the WalMart heirs, five I believe and one who is working, control 120 Billion in stock and the annual 3B in dividends that come off it, is obscene

              “ Success has a great tendency to conceal and throw a veil over the evil of men. ” — Demosthenes

              by Dburn on Sun Jun 02, 2013 at 07:07:55 PM PDT

              [ Parent ]

              •  Dburn - why are they subsidies to Walmart? (0+ / 0-)

                Do you think if the safety net programs were not available the market clearing price for retail workers at Walmart would increase? I don't know, but I haven't seen any data that would suggest that it would.

                My only point in all of this is that it would be interesting to have someone, who is objective, do research on what are the costs and benefits of having a Walmart and it's impact on the employees and the community. I have read lots of articles written by people with a partisan view on both sides, but it would be very useful to have some unbiased data.

                "let's talk about that"

                by VClib on Sun Jun 02, 2013 at 11:21:24 PM PDT

                [ Parent ]

                •  Awhile back (0+ / 0-)

                  Walmart was caught distributing medicaid forms to new employees in CT I believe.

                  If WalMart can roll over competition to where they are the single employer in that area which then forces employees to get taxpayer benefits, I don't see how it can be seen as anything less than a subsidy for a business model that walks the line of monopoly depending on the area they are in.

                   If they paid a living wage, there would be no need for taxpayer benefits to , in effect, subsidize the stores business model of paying the employees the lowest wages they can with no benefits.

                  The true test, which of course studies would have to be done , would Wal-Mart survive if they could no longer depend on taxpayers to do the make-up work to keep their employees alive.

                  The last time I broke it down, Wal Mart's profits averaged less than an average employee's wages. Neither was very much , but if you multiply by 1.2 Million it comes out to quite a bit.  

                  The market was probably more responsible for Wal Mart's stock going up 35% in the last year over their operating results. But it does show better  where the nations wealth is ending up.

                  “ Success has a great tendency to conceal and throw a veil over the evil of men. ” — Demosthenes

                  by Dburn on Mon Jun 03, 2013 at 10:43:36 AM PDT

                  [ Parent ]

                  •  Dburn - while there may be some communities (2+ / 0-)
                    Recommended by:
                    nextstep, Dburn

                    where they have a dominant retailing position I don't think Walmart is a single employer anywhere. And maybe in small towns this issue is more acute than in major metro areas.

                    "let's talk about that"

                    by VClib on Mon Jun 03, 2013 at 11:23:04 AM PDT

                    [ Parent ]

                    •  That was Sam's strategy ... (1+ / 0-)
                      Recommended by:
                      VClib

                      But it had grown itself out. A number of years back Wal-Mart corporate decided to go into the big cities and small ones too.

                      It becomes an issue when the economy is flat and running on empty even in a big city. The best time for expansion is when the competitors and political opposition is at their weakest.

                      “ Success has a great tendency to conceal and throw a veil over the evil of men. ” — Demosthenes

                      by Dburn on Mon Jun 03, 2013 at 04:14:17 PM PDT

                      [ Parent ]

                    •  Here is slightly slanted study (0+ / 0-)

                      But parallels more succinctly what I was trying to say:

                      How Taxpayers Underwrite Walmart’s Bad Jobs
                      Posted by Amy Traub on May 31, 2013

                      In the study Robert Hiltonsmith and I recently completed, we find that taxpayers underwrite nearly 2 million poorly-paid jobs through federal contracts and other funding streams that channel our public dollars to private companies that perform work on behalf of America, but treat their employees in a very un-American way, failing to pay enough to support a family.  

                      Two million sounds like a big number, especially when you consider that not only the two million workers directly employed but also the families and communities they are part of are profoundly impacted by the low wages, irregular work schedules, and lack of benefits these jobs provide.

                      The problem is: our number is too low.

                      We looked at U.S. workers employed by government contractors, paid by federal health care spending, supported by Small Business Administration loans, working on federal construction grants, and maintaining buildings leased by the federal government. But we didn’t analyze the many other ways that taxpayers subsidize the workforce costs of every private employer who fails to pay a livable wage by offering Medicaid coverage, subsidized housing assistance, the food-stamp program, child-care subsidies, energy assistance, and reduced-price school meals to workers who could not keep coming to work every day without them. The reality is, as local, state, and federal taxpayers we subsidize the bottom line (and buoy the stock price) or every private sector company that doesn't pay its employees enough to live on.

                      The biggest beneficiary of taxpayer largesse is our nation’s largest employer, the low-wage behemoth Walmart. This week a new study by the Democratic staff of the U.S. House Committee on Education and the Workforce draws on data from Wisconsin’s Medicaid program to find that a single 300-employee Walmart Supercenter in Wisconsin may cost taxpayers anywhere from $904,542 to nearly $1.75 million per year, or about $5,815 per employee. Wisconsin has 100 Walmart stores, 75 that are Walmart Supercenters.  Nationwide, Walmart has more than 4,000 stores.

                      As I’ve written before, Walmart has been a pioneer in low-wage, low-benefit employment, driving down wages in the retail industry  and beyond and blazing a dubious path for other companies to follow...Read the rest

                      “ Success has a great tendency to conceal and throw a veil over the evil of men. ” — Demosthenes

                      by Dburn on Mon Jun 03, 2013 at 05:26:54 PM PDT

                      [ Parent ]

                      •  That $5815 (0+ / 0-)

                        Looks very close to the $6995 figure in profit from each employee. That was awhile ago though.

                        “ Success has a great tendency to conceal and throw a veil over the evil of men. ” — Demosthenes

                        by Dburn on Mon Jun 03, 2013 at 05:29:09 PM PDT

                        [ Parent ]

        •  You know, I see your point (13+ / 0-)

          To the average taxpayer, it might make more sense, and seem to cost us less in tax expenditures, to have all these people working for Walmart, albeit for ridiculously low wages, and take some public assistance to get them the rest of the way to surviving, than to have all these people unemployed.

          However, what we're saving in taxes, is the cost of sending the message that as a society we're ok with a handful of people getting filthy rich, at our expense, and at the expense of thousands of workers and their families, who have to work as much as they can just to get by, without much in the way of job satisfaction, job security, advancement opportunities, health care, sick leave, maternity or paternity leave, and training reimbursement.

          I don't want these people to be unemployed, but if we're going to send the message that society needs them to be working, we should at least make sure the work is compensated enough that their families don't go hungry.

        •  Romney (11+ / 0-)

          himself couldn't have said it better.  Only Ebeneezer Scrooge tops your comment: Are there no poorhouses?  

          Here's a tip for you.  If an employer won't pay a worker enough for the worker to stay off the dole, it's a blight on society.  When that employer is the number one employer in America, it's a negative feedback loop of rent seeking, both for its societal victims and the government.  A value added tax to scumbag employers en lieu of a living wage should be the first item in getting our fiscal house in order.  

          Bad things aren't bad! And anyway, there's mitigation!

          by Nada Lemming on Sat Jun 01, 2013 at 01:44:54 PM PDT

          [ Parent ]

          •  Nada - a value added tax (VAT) (1+ / 0-)
            Recommended by:
            Lujane

            works like a national sales tax, although it's  more complex. However, it does show up in the retail price of products. The tax goes to the federal government and not to employees.  A US VAT would impact retailers large and small. There is no way to have a VAT that would just impact Walmart, or even all big box retailers. The VAT travels with the product itself regardless of who eventually sells it.

            I am confused by your suggestion and how it would benefit Walmart employees.

            "let's talk about that"

            by VClib on Sun Jun 02, 2013 at 11:41:10 AM PDT

            [ Parent ]

        •  Another asshole teatard shows up (3+ / 0-)
          Recommended by:
          eXtina, splashy, OooSillyMe

          can you read fucktard? Why should I pay with my tax dollars walmart employees? The people who own walmart are fucking billionaires, are responsible for sending millions of american jobs to our enemy,China.
          They can afford to pay their people a living wage but choose to be greedy cocksuckers instead. If you shop at walmart you are just as much a stupid asshole as the walton family are.  

          Hillary Clinton 2016

          by artr2 on Sat Jun 01, 2013 at 03:23:03 PM PDT

          [ Parent ]

        •  Yes, like the guy quoted who was making (2+ / 0-)
          Recommended by:
          207wickedgood, Outraged Mom

          something like $11 something an hour and couldn't get by.

          That's well above minimum wage so he - and probably the majority of Walmart workers - wouldn't be helped by raising the minimum wage (unless it was doubled or something, which is complete fantasy).

          •  they don't get forty hours a week.... (2+ / 0-)
            Recommended by:
            JerryNA, Lujane

            they are all part-time employees so Walmart doesn't have to pay benefits.....
            they are greedy scum and our tax code makes them richer and richer.
            You try living on $220.00 a week before withholding.

            If a free society cannot help the many who are poor, it cannot save the few who are rich. John F. Kennedy ( inaugural address, January 20, 1961)

            by Outraged Mom on Sun Jun 02, 2013 at 12:15:55 PM PDT

            [ Parent ]

        •  Well, perhaps you need to think harder? (5+ / 0-)
          Recommended by:
          mrkvica, splashy, caul, JerryNA, Lujane

          Here's WalMart's MO:

          * Move into a town

          * Set all its prices near or cost, possibly to the point where that individual store is losing significant amounts of money.

          * Wait for all the other local businesses to go out of business.

          * Raise prices significantly.

          * Rake in the dough.

          If they had local competition that couldn't be easily dislodged, they'd either get stuck in 'losing money' step (which they certainly don't want in the long term) or they'd have to price competitively, but not below cost, and compete with the local companies. Which almost certainly means lower prices than the 'steady state' above, once they've driven all the other companies in the area out of business.

          •  Does Target know about this? (1+ / 0-)
            Recommended by:
            Sparhawk

            Once Walmart raises its prices, Target would have a fiduciary responsibility to its shareholders to open a store in these strange places where no one has cars to drive to nearby towns and no one has Internet access to order from amazon.com.

            "states like VT and ID are not 'real america'" -icemilkcoffee

            by Utahrd on Sat Jun 01, 2013 at 09:29:18 PM PDT

            [ Parent ]

          •  Fred - if Walmart did that it's a violation (2+ / 0-)
            Recommended by:
            Sparhawk, Lujane

            of the Sherman Act. Given how closely Walmart is watched I would think that if they did as you suggest, on a routine basis, someone would have noticed. It is easy to see prices at the stores versus prices on their website. If they sell below cost to drive the mom and pops out of business that's clearly illegal and they should be challenged. The data wouldn't be that hard to develop. My guess is that Walmart's costs are less than mom and pop retailers so they can price low and take market share. That's not illegal.

            "let's talk about that"

            by VClib on Sat Jun 01, 2013 at 09:32:52 PM PDT

            [ Parent ]

            •  And (3+ / 0-)
              Recommended by:
              conniptionfit, caul, Lujane

              who is enforcing the Sherman Act.  DOJ won't go after banks for outright fraud and you are thinking the Sherman Act is going to protect us from Walmart pricing.  You Funny.

            •  The Anti-trust laws in this country have (1+ / 0-)
              Recommended by:
              Lujane

              been rendered impotent (castrated?) by the Republican policies of "big business can do no wrong"

              We live in a world of monopolies and it is only going to get worse.

              If a free society cannot help the many who are poor, it cannot save the few who are rich. John F. Kennedy ( inaugural address, January 20, 1961)

              by Outraged Mom on Sun Jun 02, 2013 at 12:24:05 PM PDT

              [ Parent ]

              •  And Obama's DOJ has not lifted a finger either (0+ / 0-)

                Other than to flick us off.

                The DOJ could file Anti-Trust verses Wal-Mart, but the Democratic leadership won't because they fear a loss of campaign donations.

                Robert Reich said it best: Who needs Republicans to cozy up with the wealthy on Wall Street when the Democrats are working so to get in bed with them.

                Stupid question hour starts now and ends in five minutes.

                by DrillSgtK on Sun Jun 02, 2013 at 06:00:28 PM PDT

                [ Parent ]

          •  You forgot one part... (1+ / 0-)
            Recommended by:
            Lujane

            ...Walmart often gets significant tax incentives to move into an area. So the people who live there are essentially paying for the privelege of this happening to them, in more ways than one.

        •  Study Roman history (5+ / 0-)
          Recommended by:
          mrkvica, splashy, Kevskos, caul, Lujane

          Specifically the period of the rise of Julius Caesar, and the issue of chronic poverty within the republic - why?

          The overuse of slave labor - leaving the citizenry of the nation without work, income, or wealth.

          This lead to laws limiting the use of slave labor, and increased societal wealth.

          Of course the Roman senate was opposed to such measures - and the rest is history.

          A senate corrupt and composed of the "1%" of that period - revolution, and the start of a tyrannical empire.

          This is a social issue, much more complex then your 2+2=4 argument would have one believe.

          “Those who can make you believe absurdities, can make you commit atrocities.” ... Voltaire

          by RUNDOWN on Sat Jun 01, 2013 at 08:28:56 PM PDT

          [ Parent ]

        •  Ife the Wal Mart workers were paid more (6+ / 0-)

          Then they would spend more, and there would be more other businesses start up because there would be more money circulating.

          See, the real reason to pay them more is to get more of the life blood, money, of the economy circulating.

          As it is, they owners are hoarding the money, where it does no good for the economy.

          Women create the entire labor force. ---------------------------------------------------------------------------------------- Sympathy is the strongest instinct in human nature. - Charles Darwin

          by splashy on Sat Jun 01, 2013 at 08:47:19 PM PDT

          [ Parent ]

          •  splashy - the Walmart "owners" don't hoard (2+ / 0-)
            Recommended by:
            nextstep, Sparhawk

            the money. While the Walmart family still has a significant ownership the majority of Walmart is owned by the public so when the company sends out dividends the cash is sent to people in all 50 states. In addition, Walmart isn't one of those companies sitting on a big pile of unused cash. Walmart's current liabilities exceed its current assets. In addition, Walmart has been using its cash to rapidly expand so the notion that Walmart, and its owners, are hoarding cash in another Internet fable.  

            "let's talk about that"

            by VClib on Sun Jun 02, 2013 at 08:44:05 AM PDT

            [ Parent ]

            •  oh you are so naive.... (0+ / 0-)

              Walmart's liabilities exceed its assets because the Walton family controls the Board and assets are funneled out to them through the formation of subsidiaries, etc.

              If a free society cannot help the many who are poor, it cannot save the few who are rich. John F. Kennedy ( inaugural address, January 20, 1961)

              by Outraged Mom on Sun Jun 02, 2013 at 12:26:55 PM PDT

              [ Parent ]

            •  While I agree with you generally, (2+ / 0-)
              Recommended by:
              Lujane, VClib

              This comment is inaccurate:

              While the Walmart family still has a significant ownership the majority of Walmart is owned by the public so when the company sends out dividends the cash is sent to people in all 50 states.
              See Yahoo finance

              So it appears that at least 50% of WMT is owned by Sam's heirs.

              My calculation is that their aggregate annual income from dividends exceeds $3 billion. I take your word for it that the company is not sitting on a lot of cash. But the Waltons evidently are.

              Note to Boehner and McConnell: "You don't need a weatherman to know which way the wind blows." --Bob Dylan-- (-7.25, -6.21)

              by Tim DeLaney on Sun Jun 02, 2013 at 03:59:29 PM PDT

              [ Parent ]

              •  Thanks Tim, I didn't bother to look up the detail (1+ / 0-)
                Recommended by:
                Tim DeLaney

                The family is certainly sitting on a lot of cash, but the company isn't. I haven't taken the time to do a deep dive on Walmart's SEC reports but I would be surprised if Outraged Mom's statements are true. In the post Sarbannes-Oxley world it is very difficult to have public companies involved in related party transactions and if they are they have to be fully reported to the SEC.

                "let's talk about that"

                by VClib on Sun Jun 02, 2013 at 06:10:40 PM PDT

                [ Parent ]

        •  uprated because the HR was out of line...you did (3+ / 0-)
          Recommended by:
          VClib, Tim DeLaney, Lujane

          nothing that deserved it.  We are not suppose to HR just because we disagree with someone.

      •  That's bullshit, Pierre (1+ / 0-)
        Recommended by:
        JerryNA

        Repeatedly debunked.  No study has ever shown a minimum-wage drag on job creation, no numbers exist, it is all horseshit, so why are you wasting our time with it.

  •  Walmart employs two million people. (24+ / 0-)

    http://www.businessinsider.com/...

    If even half of them are receiving $1,000 is government support then that's $1,000,000,000, not just millions.

    And that's probably conservative.  We're likely talking about multiple billions in support.

  •  Suggests? (15+ / 0-)

    Suggests?  

    Walmart employee policies cost taxpayers - it's just that simple.

    And all these taxpayer dollars benefit the Walmart heirs -not only are they stealing the value of their workers' labor, they are also sucking up taxpayer dollars.

    The banks have a stranglehold on the political process. Mike Whitney

    by dfarrah on Sat Jun 01, 2013 at 08:46:44 AM PDT

  •  I don't get it (4+ / 0-)
    Recommended by:
    VClib, Sparhawk, futurebird, Utahrd
    What they tend to ignore is that Walmart's prices are already so low that smaller stores are unable to compete. It's true that the cost of wages is a factor on prices, but so is competition, or the lack thereof. If anything is found to be the stronger factor on prices, in the real world, it always comes down to competition.

    If Walmart is forced to raise its prices, other stores will be able to compete better. As the competition to Walmart increases, so will the pressure to keep prices low.

    I don't get it.

    - Walmart prices stuff low hence no one can compete
    - If others could compete then you say prices will become low.
    - But if prices become low because of competition, others won't be able to compete.

    My head is spinning here.

    •  Supply and Demand (9+ / 0-)

      Let's say Walmart sells some product X. Because of all of its organizational advantages, Walmart can afford to sell this product a buck cheaper than another store. As a result, buyers only go to Walmart to buy product X, its competitor can no longer afford to stock product X. In other words, supply goes down. When supply goes down, prices eventually go up.

      Let's say Walmart has to pay its employees more, and as a result, the price it sells product X for goes up fifty cents. Even though it might still be cheaper than what a competitor sells, perhaps the competitor's product is higher quality, easier to use, etc, something that makes up for the high price, but now the prices are much closer that Walmart no longer has a clear price advantage. As customers go to the competitor for product X, the competitor is receiving more business, more profits, more ways to keep its shelves stocked with the product. In other words, supply goes up, meaning theoretically, prices will go down.

      This is the relation between competition, supply and demand. As stores compete, they are forced to lower prices, or provide higher quality, or something, to draw in customers and draw customers away from competitors. In this equation, the customers benefit. However, Walmart is able to blow its competitors completely out of the market because of its advantages such as the low wages it can afford to pay its employees. So customers might benefit in the short term by low prices at Walmart, but it ends up paying in the long run from loss of competition, and then the above added wrinkle of having to pay food stamps and such to Walmart's employees.

      •  Remember, too, that some manufacturers, (12+ / 0-)

        in order to remain a Walmart supplier and sell at low prices, have plants that ONLY manufacture for Walmart. I read an article a few years ago. The only one I can think of right now is Oster. They use cheaper materials and labor in these factories. So an Oster blender at Walmart is not the same as an Oster blender at Bed Bath and Beyond.

        Will see if I can find that article.

        "...Males are biologically driven to go out and hunt giraffes.” —Newt Gingrich in 1995

        by BadKitties on Sat Jun 01, 2013 at 10:42:15 AM PDT

        [ Parent ]

      •  why? (2+ / 0-)
        Recommended by:
        VClib, NoMoreLies
        However, Walmart is able to blow its competitors completely out of the market because of its advantages such as the low wages it can afford to pay its employees
        Why can it's competitors not afford to pay their employees low wages?
      •  pierre - what you are suggesting (5+ / 0-)

        is that at some point Walmart could extract what we economists call monopoly rents by driving all the competition from the market with initial low prices. That theory doesn't work in this example for two reasons. Walmart has been around long enough so that if that theory actually worked we would have seen higher prices in at least some markets, on some products. Second, Walmart sells goods that have nearly unlimited substitutions so that even if their competitor can no longer sell product X, they can sell a substitute.

        If Walmart raises its labor costs its prices will rise and their business model is to have the lowest prices so they will resist raising labor costs. A national increase in the minimum wage is one way to help. Union organizing will be another, although I think Walmart will close stores rather than have them unionized so they will be a tough nut to crack.

        "let's talk about that"

        by VClib on Sat Jun 01, 2013 at 10:59:16 AM PDT

        [ Parent ]

        •  I'm not an expert on economics (2+ / 0-)
          Recommended by:
          mrkvica, Kevskos

          so no doubt my example is not going to be the best argument. I was just trying to add a factor that I feel doesn't get mentioned a lot, when in reality there are so many factors involved in any given policy change like an increase in the minimum wage that it is rare that the results concretely support one argument or the other.

          It just seems to me the arguments opponents to raising the minimum wage use - in this case, that it would raise prices - never really seems to bear out, in practice or in theory.

          I guess as an actual economist you could provide some more insight?

    •  Did you read this sentence? (1+ / 0-)
      Recommended by:
      Lujane
      As the competition to Walmart increases, so will the pressure to keep prices low.
      Please note the word I've bolded.  To "keep" prices low is not the same thing as lowering prices, is it?

      It's not a case of lowering prices - the prices are already low.  Competition encourages keeping said prices that way.  

      'Cause when you're the only game in own, you can pretty much run it however you want.  There are towns where the only major store is a Wal-Mart.  If that Wal-Mart wants to raise prices, where are the people going to go?

  •  I guess this make Walmart a taker? nt (11+ / 0-)

    Might and Right are always fighting, in our youth it seems exciting. Right is always nearly winning, Might can hardly keep from grinning. -- Clarence Day

    by hestal on Sat Jun 01, 2013 at 10:53:43 AM PDT

  •  We're all paying the Walton family with our tax (15+ / 0-)

    dollars since they don't pay their employees a living wage.  No one with a family could work at Walmart without the Earned Income Tax Credit, Child Tax Credits, SNAP, and every bit of support they can find.

  •  When we buy cheap goods, we drive down our wages.. (5+ / 0-)

    ...making it temporarily unnecessary for all employers everywhere to give people decent wages. This masks the effects of low wages, and it has done so for a long time.

    For example, if a teacher doesn't get paid enough, a quick fix would be to shop at a store like Wal Mart to compensate for the lack of disposable income. This creates a ripple effect when Wal Mart in turn must rely on cheaper, third world labor to get their rock bottom prices.

    The only two alternatives are either to demand higher wages, or not purchase anything and live within one's means with less material goods. Both are better alternatives than shopping at Wal Mart.

  •  In a sane world, (0+ / 0-)

    I think the Wal-Mart model would actually work great.

    Lower and Middle Class Americans get a place they can buy cheap stuff. Low skilled inexperienced workers (teens, students, etc) have a place they can actually work at while still being able to make ends meet, since public assistance makes up the gap. The rich would have to take up the tab of this public assistance through taxes, but hey, we all surely know that what benefits the rich the most is a vibrant full-participatory economy.

    Meanwhile, the people of the Third World get valuable manufacturing jobs with fair wages that will help lift them out of poverty.

    Of course, this requires a sane world. In our world, we have greedy plutocrats that want slave labor both overseas and at home, and don't want to help pick up the tab on making sure the poor don't starve to death working for them; the Middle Class ends up paying for being able to buy cheap stuff at Wal-Mart, defeating the purpose.

  •  Great Diary! tip rec repub (5+ / 0-)

    Hellraisers Journal will be covering the #Ride4Respect until the June 7th stockholders meeting in Bentonville, Ark.

    Here are few links for anyone who wants to support the #Ride4Respect and/or the Walmart Workers who are now out on ULP strikes:

    Follow the #Ride4Respect
    https://twitter.com/...

    SIGN THIS PETITION
    Stand with Walmart Workers/Petition for June 7
    http://action.changewalmart.org/...

    DONATE
    https://donate.changewalmart.org/...

    JOIN/PLAN AN EVENT
    http://corporateactionnetwork.org/...

    Connect with OUR Walmart
    http://forrespect.org/

    In Solidarity,
    JayRaye

    God spare me the Heart to fight them... I'll fight the Pirates forever. -Mother Jones

    by JayRaye on Sat Jun 01, 2013 at 05:19:05 PM PDT

  •  "Externalities" (illegal ones) (6+ / 0-)

    Wal*Mart offers benefits, but at cost points that their average workers cannot reach. They are aware, at corporate, that their employees are SNP practitioners and the like. In fact, they point, from time to time, of Wal*Mart employees in need who have been helped by the employee donation program (the poor giving to help the poorest).

    However, they can claim that this is a corporate success story. Given that they believe that long ago the bottom was reached on material costs, the bottom was reached on efficient inventory, the only cost they can continuously reduce for "low low prices, every day" is wage. This is an illusion, a lie -- a lie make feasible by the MBA culture and the stock market and the stability of the U.S.

    Were we even slightly less competent as a government (particularly a police), then Wal*Mart would see revolt. Whenever they go abroad, they do. The US, though, is so stable that they can act like Marie Antoinette and stay in the palace.

    "...ere God made us He loved us; which love was never slacked, nor ever shall be." - Juliana of Norwich

    by The Geogre on Sat Jun 01, 2013 at 06:50:02 PM PDT

  •  Great diary but (5+ / 0-)
    Recommended by:
    myboo, mrkvica, 207wickedgood, Kevskos, JerryNA

    please don't buy into their meme that they have lower prices.  They really don't, not on groceries and not on merchandise comparable to what's sold at other retailers.  Just because they say so doesn't make it so.

    •  And just because (3+ / 0-)
      Recommended by:
      avamontez, JerryNA, Cassandra Waites

      there shoppers are sure does not mean so.  Whenever I try to tell that to someone who shops at Walmart they always get defensive like they know it but can not admit it.

      I was in a Walmart last year with a coworker using his PO to buy some food and decided to check the unit prices on Peanut Butter and compare to the 'upscale' Albertson's (Union) I shop at.  The Walmart was much lower for name brand, Jiff I think, PB but the Albertson's was cheaper for store brand and the lowest price overall.

  •  When I do the math it's Billions not just millions (3+ / 0-)
    Recommended by:
    CharlieHipHop, Kevskos, JerryNA

    that this welfare costs taxpayers.  There are over 4,000 Walmart stores in the US.

    At 900K per store that is $3,600,000,000.  So even if only half the workers actually collect that well beyond must millions.

    Maybe this should be retitled to say Walmart is costing taxpayers Billions

    Congressional elections have consequences!

    by Cordyc on Sat Jun 01, 2013 at 07:40:11 PM PDT

  •  The quote from the worker...sigh (1+ / 0-)
    Recommended by:
    Sparhawk

    was not a good one.  Aubretia Edick getting $11.70 an hour? Wow, that is great pay.  Better pay than an EMT-Basic gets at start.  And they save lives, not run check out stations.

    Last I checked Minimum Wage was $7.85 an hour.  Way low. But higher than the national MW.

    Still, $11.70? Factory jobs at Ford in Ohio start at $14 an hour.

    Couldn't they find someone who was paid minimum wage to get a quote from?  There are a lot of families who make ends meet with out assistance at $10 an hour.

    The guy working forty hours a week for $9.50 in a stock room in Brookpark Ohio is not going to feel anything for Aubretia Edick who gets $2.20 more than he does.  He is not going to say "gosh we need to do something" he is going to say "I would love to get $11 an hour, i'm going to apply to Wal-Mart".

    When you try to make a point, be aware of the numbers.  I'm a Paramedic and I only get $14 an hour.  She is making more than my partners (basics).  Had they quoted Jane Doe a Massachusetts woman who earns $7.90 an hour and receives public assistance, food stamps, Section 8 housing, and state-funded health care, said her reliance on the safety net is one reason she plans to join the strikes. “Walmart doesn't pay my salary,” she said. “You pay my salary.”  that would have been better.

    Stupid question hour starts now and ends in five minutes.

    by DrillSgtK on Sat Jun 01, 2013 at 07:42:43 PM PDT

  •  Isn't one of the (6+ / 0-)

    problems most Walmart workers are part time vs full time?  

    •  Yes, that's what I understand (2+ / 0-)
      Recommended by:
      myboo, Cassandra Waites

      Many are also on call 24/7 too, which means they can't do anything else but wait to go to work. They can't schedule another job, going to classes, or even a cookout with friends or family.

      They could be called in at any time of day or night, and because they aren't allowed full time and need every single hour, they have to be available.

      Women create the entire labor force. ---------------------------------------------------------------------------------------- Sympathy is the strongest instinct in human nature. - Charles Darwin

      by splashy on Sat Jun 01, 2013 at 08:56:13 PM PDT

      [ Parent ]

  •  Toujours le prix bas. Toujours. (2+ / 0-)
    Recommended by:
    pierre9045, Kevskos

    Please don't call the language police on me.

    A cursory check shows that there are lots of Walmarts in Canada with its higher minimum wage.

    But Canada spends its money on education and not trying to find nonexistent weapons of mass destruction.   So fewer Canadians are willing to work for low pay in jobs that involve missing Hockey Night in Canada.

    "states like VT and ID are not 'real america'" -icemilkcoffee

    by Utahrd on Sat Jun 01, 2013 at 09:38:43 PM PDT

  •  add (2+ / 0-)
    Recommended by:
    pierre9045, JerryNA

    in the 2.7 million manufacturing livable wage jobs lost to China:
    http://www.usnews.com/...

    That tallies up to about $108 billion a year in lost income to American workers with a guesstimated average manufacturing wage of around $40k with benefits.

    "History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling the money and its issuance." -James Madison

    by FreeTradeIsYourEpitaph on Sat Jun 01, 2013 at 09:49:45 PM PDT

  •  I hate Walmart (4+ / 0-)
    Recommended by:
    pierre9045, Kevskos, avamontez, JerryNA

    They are horrible anti-labor employers, and they are parasites on the welfare programs set up to help poor people. They are a sociopathic corporation.

    Carbon di-oxide in the atmosphere is now 400ppm. That is "Climate Cluster Chaos". (hat tip to JeffW for CCC)

    by Zinman on Sun Jun 02, 2013 at 12:14:25 AM PDT

  •  Walmart is encouraged to keep their (0+ / 0-)

    employees underpaid.  They get a tax break for hiring people who receive public assistance.  


    The religious fanatics didn't buy the republican party because it was virtuous, they bought it because it was for sale

    by nupstateny on Sun Jun 02, 2013 at 07:10:52 AM PDT

  •  Soon they'll establish an even cheaper store (0+ / 0-)

    so Wal-Mart employees will have a place where they can afford to shop.

    Private health insurance: a protection racket without the protection.

    by rustypatina on Sun Jun 02, 2013 at 10:01:33 AM PDT

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