f

[stylized_fact]

I've bought into the argument that the only way to force Walmart off it's government subsidies is to raise the Federal minimum wage.

 

Their workers are not getting by on Walmart's wages alone, they also get subsidies (like foodstamps) from the government.  Thus, the government is pushing Walmart's profits up by taking on part of the cost of keeping their workforce alive. 

 

So if you force them to pay a living wage, you can then take the workers off of government assistance.

 

[Otsog]

2014 is the 100 year anniversary of Henry Ford's 5 dollar workday, a doubling of the going rate of labour $2.34.

 

$5 today is approximately $120, which works out to $15/hour for an 8 hour day.

$2.34 today is approximately $56, which works out to $7/hour for an 8 hour day.

 

Manufacturing jobs were good jobs for the next ~80 years, an honest days work for an honest days pay (labour vs. management is a constant battle, but in general they were). But, at the time, Ford's competitors couldn't match him, Ford was far and away the low cost producer in the industry.

 

Raising minimum wages will always advantage the low cost leaders in an industry and squeeze (and maybe bankrupt) more inefficient operations, making it a political challenge.  You will be blamed for driving a lot of mom and pop small businesses out of business. Even though they are just terrible at running a business (see: The Profit, Kitchen Nightmares) or they are unable to evolve their cost structure in the times of globalization and e-commerce.

 

Costco makes so much sense to me, and I am completely baffled by Walmart.  Walmart should be aggressively lobbying for minimum wages everywhere they operate.  And they should be aggressively public and self promotional about it.  Ford's 5 dollar workday meant free front page national advertising for years.

[DTEJD1997]

The anecdotal high student debt loads distort the true picture of student debt.  The median is pretty low as the majority of loans are <10k.  The bigger problem might be drop outs with student debt as people with high debt loads should have professional degrees (medical, business, etc) and be a little more well off in terms of job prospects. 

 

DTEJD1997 - I am not sure about the law job market, but I think it's much worse than other professions.

 

Here's a good article: http://www.nytimes.com/2014/06/24/upshot/the-reality-of-student-debt-is-different-from-the-cliches.html?_r=0

 

They are ALL projected to have $100k+ in student loan debt FOR UNDERGRADUATE DEGREES! 

 

One of these persons is going to University of Texas, and two others are going to lesser known skewls.

 

 

 

So the person is paying 'in state' tuition to go to UT and is going to have 100k in debt? I find that hard to believe. My guess is the person paying out of state tuition, which is their decision. There aren't any good schools in their own state? Sounds like a poor decision on their part.

 

No, the young lady is "in state".  She is living/studying in Austin and will be studying nursing.  I didn't ask to see a breakdown of their daughter's expenses, but took them at their word.

 

I think it is the "all in" cost which includes books, fees, housing, etc.

[jay21]

2014 is the 100 year anniversary of Henry Ford's 5 dollar workday, a doubling of the going rate of labour $2.34.

 

$5 today is approximately $120, which works out to $15/hour for an 8 hour day.

$2.34 today is approximately $56, which works out to $7/hour for an 8 hour day.

 

Manufacturing jobs were good jobs for the next ~80 years, an honest days work for an honest days pay (labour vs. management is a constant battle, but in general they were). But, at the time, Ford's competitors couldn't match him, Ford was far and away the low cost producer in the industry.

 

Raising minimum wages will always advantage the low cost leaders in an industry and squeeze (and maybe bankrupt) more inefficient operations, making it a political challenge.  You will be blamed for driving a lot of mom and pop small businesses out of business. Even though they are just terrible at running a business (see: The Profit, Kitchen Nightmares) or they are unable to evolve their cost structure in the times of globalization and e-commerce.

 

Costco makes so much sense to me, and I am completely baffled by Walmart.  Walmart should be aggressively lobbying for minimum wages everywhere they operate.  And they should be aggressively public and self promotional about it.  Ford's 5 dollar workday meant free front page national advertising for years.

 

What's the people/worker intensity of Walmart vs Costco (i.e. does Walmart's business model require more people than Costco's)?  Also, I would think that Walmart's competition may become increasingly automated and less reliant on minimum wage jobs (e.g. Amazon?), therefore they should still want low minimum wages.

 

[turar]

Ukraine is making progress over the past. 40 years ago they were a communist state, now they are a (pseudo democratic) country, the protest was a political one. What they were protesting was very different from the income inequalify of the article in question. I argue that in general most countries are making progress towards betterment of its people including US.  The article is saying that the US is going backwards in terms of social progress.  Who knows maybe the next Arab spring is in Russia.

 

Ukraine is not making progress. The real cause of the protest was economical, as with most protests, including Egypt's, etc. Ukraine's economy has been hit very hard in 2008 crisis, and also has been contracting continuously since 2012, and people have seen their income and wealth diminish. Obviously not to the level of some African countries, but worse than they had earlier, and that's the worst kind of comparison in one's mind, when people are not advancing.

 

You may argue that US is making progress in inequities, but facts remain facts, statistics are not supporting your statements. See also this for example: http://web.stanford.edu/group/scspi/_media/working_papers/pfeffer-danziger-schoeni_wealth-levels.pdf

[ERICOPOLY]

I've bought into the argument that the only way to force Walmart off it's government subsidies is to raise the Federal minimum wage.

 

Their workers are not getting by on Walmart's wages alone, they also get subsidies (like foodstamps) from the government.  Thus, the government is pushing Walmart's profits up by taking on part of the cost of keeping their workforce alive. 

 

So if you force them to pay a living wage, you can then take the workers off of government assistance.

 

 

Thanks.  That was really good.

[jay21]

2014 is the 100 year anniversary of Henry Ford's 5 dollar workday, a doubling of the going rate of labour $2.34.

 

$5 today is approximately $120, which works out to $15/hour for an 8 hour day.

$2.34 today is approximately $56, which works out to $7/hour for an 8 hour day.

 

Manufacturing jobs were good jobs for the next ~80 years, an honest days work for an honest days pay (labour vs. management is a constant battle, but in general they were). But, at the time, Ford's competitors couldn't match him, Ford was far and away the low cost producer in the industry.

 

Raising minimum wages will always advantage the low cost leaders in an industry and squeeze (and maybe bankrupt) more inefficient operations, making it a political challenge.  You will be blamed for driving a lot of mom and pop small businesses out of business. Even though they are just terrible at running a business (see: The Profit, Kitchen Nightmares) or they are unable to evolve their cost structure in the times of globalization and e-commerce.

 

Costco makes so much sense to me, and I am completely baffled by Walmart.  Walmart should be aggressively lobbying for minimum wages everywhere they operate.  And they should be aggressively public and self promotional about it.  Ford's 5 dollar workday meant free front page national advertising for years.

 

What's the people/worker intensity of Walmart vs Costco (i.e. does Walmart's business model require more people than Costco's)?  Also, I would think that Walmart's competition may become increasingly automated and less reliant on minimum wage jobs (e.g. Amazon?), therefore they should still want low minimum wages.

 

 

Found a few good articles:

 

"Costco has a tiny number of SKUs in a huge store -- and consequently, has half as many employees per square foot of store. Their model is less labor intensive, which is to say, it has higher labor productivity. Which makes it unsurprising that they pay their employees more."

 

"In other words, Trader Joe’s and Costco are the specialty grocer and warehouse club for an affluent, educated college demographic. They woo this crowd with a stripped-down array of high quality stock-keeping units, and high-quality customer service. The high wages produce the high levels of customer service, and the small number of products are what allow them to pay the high wages. Fewer products to handle (and restock) lowers the labor intensity of your operation. In the case of Trader Joe’s, it also dramatically decreases the amount of space you need for your supermarket ... which in turn is why their revenue per square foot is so high. (Costco solves this problem by leaving the stuff on pallets, so that you can be your own stockboy)."

 

http://www.bloombergview.com/articles/2013-08-27/why-walmart-will-never-pay-like-costco

 

"One final thing that's worth pointing out is that Costco doesn't even make money selling the groceries and the six person hot-tubs.  Their annual membership fee revenue exceeds their net profit--which is to say that the actual business of selling stuff is operating at a loss.  They're charging you an annual fee to buy stuff at or near cost.  That's a model that works really well with their basically affluent customer base, and not incidentally, a model that allows you to worry a bit less about your cost of sales.  Sam's Club tries to do the same thing, but caters to a lower-income clientele and makes a lot less money despite having more stores."

 

"The point of all of this is to say that while it might be true that Walmart could make more money by adopting Costco's labor model, there's no particular reason to think that this would be so.  The differences in their labor models are not just some sort of personal preference, or ideological choice*; they're responses to the way that labor needs to be deployed to do the quite different things that these stores do.  We say that "they're competitors" because they do compete with eachother in some markets, for a handful of SKUs.  But very few people could replace their trips to Costco with visits to Walmart, or vice versa.  Despite the superficial similarities (cheap stuff in large store) they're really very different, and you can no more graft one's labor model onto the other than you can buy a single pack of gum in the Costco checkout."

 

And a bonus anecdote:

 

"So actually, Costco's labor model is partly an ideological choice; its founder and longtime CEO, James Sinegal, was a fairly committed progressive who paid himself a very modest salary.  (He did, of course, own a good bit of stock).  There is some question about whether this is going to continue long term; Sinegal overrode his executives on a bunch of stuff related to compensation.  One signal to pay attention to: the incoming CEO makes more than twice what Sinegal did, though his mid-high six-figure salary still pales in comparison to the CEO of Walmart. 

 

But whether or not Sinegal's ideology mattered, he would have had a hard time paying those kinds of salaries in a Walmart style operation, which is much more labor intensive, so that each extra dollar of wages cuts more deeply into the bottom line."

 

http://www.thedailybeast.com/articles/2012/11/26/why-can-t-walmart-be-more-like-costco.html

[Otsog]

Interesting, thanks for looking it up.

 

I grabbed these rough #s from their latest annual reports:

 

Costco 184,000 employees

Costco 648 locations

283.95 employees per store

 

Walmart 2.2 million associates

Walmart 6,100 retail units in 26 countries

360.66 employees per store

 

[Vish_ram]

This is about wealth inequality.

 

The pattern that I'm seeing is that any Stock market boom exacerbates the wealth inequality.

 

Look at 1929 and recent 82-2014 booms.

 

see http://www.economist.com/blogs/graphicdetail/2014/11/daily-chart-2?fsrc=scn/tw/te/bl/ed/somearemoreequalthanothers

[rkbabang]

It isn't surprising that the richest people on Earth are richer than a large percentage of the population, when even the poorest human being on earth is richer than the bottom 37%. Yes the poorest individual human being on Earth has a higher net worth than the bottom 37% of the people on Earth.

Why?  Because the bottom 37% of the people on Earth have a negative net worth which is much further negative than the poorest individual's net-worth. The Wealth inequality numbers that are thrown around are very misleading.  The poorest people on the planet are not in Africa, rather they are in the U.S., because that is where you find the people with the largest negative net worth.  Living in a stone age culture in Papua New Guinea and having a net worth around zero, puts you pretty high up the scale, even though the "poorest" people are living in the U.S. sitting in their heated housing, on their comfortable couch, playing xbox on their flatscreen TVs, munching on pizza and drinking beer.

 

Yes 80 billionaires have wealth of bottom 48% but even the poorest person has the wealth of the bottom 37%

 

[stahleyp]

https://www.marketwatch.com/story/wealth-inequality-in-the-us-is-almost-as-bad-as-it-was-right-before-the-great-depression-2018-07-19

 

We're not quite to the peak yet. :P

 

"The top 1% of Americans took home more than 22% of all income in 2015, the study found. That’s the highest share since a peak of 23.9% just before the Great Depression in 1928."