What Wal-Mart Could Do
Jonathan Tasini at Working Life points to a good story in today's New York Times about growing pressure on Wal-Mart to take the high road on wages and benefits for its workers. Some of the highlights:
Wal-Mart critics often note that corporations like Ford and G.M. led a race to the top, providing high wages and generous benefits that other companies emulated. They ask why Wal-Mart, with some $10 billion in profit on about $288 billion in revenue last year, cannot act similarly.It's true that Wal-Mart family heirs have dropped from the list of the 10 richest people in the world -- they now merely make the top 15 -- but I still vote for "accepting somewhat lower profits."Many of those assailing Wal-Mart argue that the company can, and should, pay its workers at least $2 more an hour and add $1 or $2 an hour beyond that to improve its health benefits. A Harvard Business School study found that Wal-Mart paid $3,500 a year for each employee for health care, while the typical American corporation paid $5,600.
If Wal-Mart spent $3.50 an hour more for wages and benefits of its full-time employees, that would cost the company about $6.5 billion a year. At less than 3 percent of its sales in the United States, critics say, Wal-Mart could absorb these costs by slightly raising its prices or accepting somewhat lower profits.
4 Comments:
but I still vote for "accepting somewhat lower profits."
What! Are you some kind of Commie terrorist? Accept lower profits? You're insane man, I say insane.
Everyone knows that is not the 'murican way. Everyone knows that raising wages will lead to companies taking their business elsewhere which will lead to the downfall of 'murica.
Greed is the way. It is the only way to succeed in this world. Have you been living under a rock? Wake up!
I think there's a fair amount that could be done without even cutting into profits: I'd like to see some back of the envelope calculations about distributing some of the pay of the 95+ percentile of Wal-Mart salaries among the remainder.
But some profit cutbacks would probably also be needed to pay a decent hourly rate to full-time employees.
The social contract is totally dead. Corporations feel absolutely no obligation to even pay starvation wages. I predict a return to sharecropping and company scrip. Serfdom anyone?
Irony or ironies. This story lauding Ford and GM was published a day before their stock was downgraded to junk status, robbing millions of shareholders (gasp, even working class people!) of millions of dollars of invested value.
The downgrading is a result of Ford and GM's long-term economic prospects because of, among other things, foolhardy commitments made to greedy unions.
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