Can Walmart and/or McDondals Afford to pay ALL workers a livable wage and make a profit? (unemployment, degree)

[pvande55]

Originally Posted by Slowpoke_TX

This question falsely assumes that there is some correlation between the cost of living and the wage that a job should pay. Wages are determined by the labor market, not by the cost of living, so the above question is not one that should be asked. Even if wages were determined by the cost of living, a corporation can't possibly know how much it costs someone to live, even if all of the corporation's employees live within the same market.

Besides, any employee who wants to make more money (without changing jobs) can simply buy shares of their employer's stock, and then enjoy the dividend checks that they receive.

To some degree there is. In places (like Detroit) where jobs are scarce the pay is less. But rents are lower. In New York, which is the only place that pays well for certain occupations, the cost of living is higher. And in North Dakota, Americas boomtown, cost of living has increased dramatically since the boom.

[Led Zeppelin]

Wages are set by the laws of supply and demand. Like everything else, labor is a commodity that is valued. And labor's value is perceived relative to it's type and demand. Labor's value is mitigated by the general economic climate of the region, nation or locale where the need exists. A ditch digger in India, for instance, might be paid much less than a ditch digger in Maryland. But that's mitigated by the cost of living, of course.

You don't SET wages artificially, without causing effects downstream. Artificial market forces work on a market like dead weight works on a balloon.

[Hemlock140]

Sure they can, but when they raise prices to maintain profits the shareholders will get upset and there will be management changes to reduce the pay back down. Even businesses that can afford to pay more are not going to, it's contrary to why they exist - to make money for the owners or shareholders. To do that you have to make the most profit possible and that means the lowest possible pay, and lowest possible prices to bring in more customers than the competitors.

[Osito]

These companies employ loads of people all over the world.

[alexanderaf]

Walmart is buying back $60 billion in shares by 2015. Their CEO's pay jumped 14% to $20.7 million. They also just paid $11 million to settle out of criminal charges for hiring illegal workers working less-than-minimum wage for cleaning and maintenance. With expenditures like that, I'm surprised they can afford to pay their workers anything

[candycanechick]

Originally Posted by boxus

It is easier to rattle out terms like "livable wage", or figures like "$15/hr", then to provide a solid argument with supporting facts.

I editited the original question Friday.

[hnsq]

Originally Posted by candycanechick

Hello,

Can places like Walmart make profit while paying EVERY employee enough money to live off of without government aid?

If possible, please state why and a reference for your opinion.

A liveable wage being 150-200% for the federal poverty limit for a 2 person family, 24k-31k per year, or $12 to $15 per hour. This meets the requirement to not require government aid. ( Food stamps require the person make less than 130% of the federal poverty guideline) This question is referring to full time workers.

It has been shown that raising the minimum wage from $4.25/hr to $7.25/hr in 1994 caused $504,004/hr loss to the net US economy (in constant 2013 dollars). A $3 increase in 1994 is equivalent to a $4.73 increase today. You are asking to effectively raise the minimum wage from $7.25/hr to $12/hr (at the most conservative). That is nearly identical to the same increase we saw in 1994, adjusting for inflation. Do you think your program is worth a roughly estimated $504k/hr loss to the net economy? I certainly don't.

You can go through the math here

[mizzourah2006]

Originally Posted by boxus

If you want to tackle the living wage issue, whatever living wage is suppose to mean, then instead of addressing how much money a person gets, you should be addressing why a person cannot live on so much. Addressing this issue would obtain far more benefits, given the global competition, then complaining that people are not getting enough money.

There are probably two or three items that take up the majority of someone's pay; find those items, then see why those items cost so much.

Another thing to consider is; Walmart pays the wages they do because there is not a demand to exceed those wages. As long as a large segment of the workforce knows the gov will step in with supplemental support, this workforce will not demand more from an employer. Has it ever occurred to you that many in the workforce actually incorporate gov benefits into their financial and life decisions?

You should also distinguish what is necessary for living too.

IMO a living wage should provide

1. A roof over your head (which in most places can be had for 4-500 a month either alone in very small areas or with 1 roommate in others). Add another 100 to include basic Electric, Water, and, Gas. $600
2. Food in your stomach. $250
3. Some form of transportation. $275
4. Basic clothing allowance. $50
5. Healthcare. $150

So a living wage should provide a person roughly $1,325 a month or just under 16k a year.

So is it not true that most of these jobs provide a living wage?

The issue is what is considered necessary to live now.

A cell phone, cable TV, a decent car, entertainment, restaurants, a PS3 or XBox, kids, daycare, etc. When you add in all of this other stuff which technically isn't necessary to live, yes you quickly need to add 5-10k to your "living wage".

Originally Posted by MrRational

Not quite.

The people that Costco is able to pick from out of the crowd are the same people who would soon be making
more than MW wherever they might be hired. At best, what Costco accomplishes with a starting rate marginally
higher than MW is to have the also-ran's self select themselves out of the pool and not even bother to apply there.

hth

They also employ far fewer people per store (the business model doesn't need as many employees as a traditional retailer) and need far fewer hours to run a successful business. Very little stocking involved, no employees in specific sections (electronics, houseware, clothing, etc.)

The average Walmart supercenter has 350 employees. The average Costco closer to 100. It's far cheaper to pay 100 people 17 an hour than it is to pay 350 people 10 dollars an hour. It's an entirely different business model that makes it easier to pay people more.

Now you could argue which is more beneficial to society 100 people that have a lower middle class income or 350 people that have some income but could potentially rely on some govt. aid if they happen to try to be supporting more than themselves.

Would you rather have 100 people earning 35k/yr and 250 unemployed or 350 people earning 16k/yr?

The funny thing is Costco is looked at as the model of how to pay retail employers well, but if everyone took that model on we would have far more people with no jobs.

[MrRational]

Would you rather have 100 people earning 35k/yr and 250 unemployed or 350 people earning 16k/yr?

Assuming that $35,000 represents an effective functional self supporting household...
Then that level should a) be attainable and b) all should earn at least close to it.

The other categories (number or pay level) really don't come into the picture for me.
Their needs and income shortfall, however real to them, really aren't a business or wage rate matter.

Originally Posted by mizzourah2006

The funny thing is Costco is looked at as the model of how to pay retail employers well,
but if everyone took that model on we would have far more people with no jobs.

Which is about where this conversation started.

The issue is not wage rates by itself. The issue is not a lack of jobs by itself.
The issue is the completely out of proportion over supply of people available for the
static (and often even lower) number of jobs that actually require doing.

This shows up to varying degrees at all strata along the wage:skill continuum...
but it is most acute, catastrophically so, at the bottom no/low skill level.

We need to find **something else** to do with these MILLION's (30M? 50M?) of people.
Pretending that there will ever be enough decent paying jobs for them, even if they
suddenly acquired the skills, personal responsibility and so forth, doesn't serve anyone.

Absent their presence in the UE rolls and in the statistics (and the application line)...
the balance of the unemployed would immediately have real world market value.

Enough market value to earn enough to be paid well enough to actually pay taxes on.
Maybe even enough to pay enough taxes to cover the costs of the others.

You know what else would happen?
Everyone else who works for a living would suddenly have greater market value as well.

[warren zee]

Originally Posted by candycanechick

Shouldn't minimum wage at the least be enough that a full-time worker does not need government aid? And, I can see my family owned store down the street paying min wage, but should a corporate GIANT be able to get away with it?

That's a good point.

That people are actually discussing weather or not Walmart, the nations largest largest employer *should* pay a living wage, boggles my mind.

The minimum wage is not a "living wage", and that is part of the problem.

Walmart and McDonalds need to stop living off the government.