the minimum wage: reality check

That is the Walmart formula and by golly it works well for them.

COSTCO was a merger of COSTCO and The Price Club.

I was an early member of the Price Club and got in automatically to COSTCO when they merged. They keep prices very low. And they I believe have a decent level of pay.

OK, now let's look at the hated WalMart

However
http://news.walmart.com/news-archiv...lmart-associates-receive-pay-increase-in-2016

I don't see COSTCO putting Walmart out of business.

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That is the Walmart formula and by golly it works well for them.

COSTCO was a merger of COSTCO and The Price Club.

I was an early member of the Price Club and got in automatically to COSTCO when they merged. They keep prices very low. And they I believe have a decent level of pay.

OK, now let's look at the hated WalMart

However
http://news.walmart.com/news-archive/2016/01/20/more-than-one-million-walmart-associates-receive-pay-increase-in-2016

I don't see COSTCO putting Walmart out of business.

 

Costco has a membership fee and Walmart doesn't. It's what allows them to maintain their business model. Costco also has dramatically less physical locations, a much smaller web presence, and a limited product offering. Many of their groceries you're forced to buy in bulk, which drives up their volume to make up for the lack of margin.

Costco's overhead is too large to afford too many locations, it would spread their sales too thin and drive them out of business. At the same time most grocery stores or big box stores wouldn't be able to get away with charging a membership fee, it would drive business away.

Costco might be better suited to handle minimum wage hikes but if all big box stores operated in Costco's business model it would hurt the consumers too.

 

True, Costco charges business $55 for membership I think. I used to hold the black card that they sell for $110 and the discount I got paid me back.

I live alone. I don't need bulk products. I shop a lot at the local Smart and final that sells around the price of Costco but has no membership. It used to be membership with the card free. Now it is open to all and no cost.

 

Which facts are those?

All you are claiming is that some consolidation will happen, and the remaining Firms will be more competitive in our global economy--at the new wage equilibrium.

 

I have a better idea. You give me all your money. You work, beg borrow and steal to keep me satisfied. I come first. You come second. If I want you, I'll send for you. Now go to work.

 

You may have to hire me first; especially in "Right to Work" States. How about that?

 

Thats not at all what I am claiming. You just arent paying attention.

 

Why do you believe that will not happen?

 

I know there is different stores everywhere, but can you imagine people having to pay $50-$60 a year to shop at every big box/grocery store? In Oregon, in addition to Costco that would be

Target
Best Buy
Walmart
Safeway
Albertsons
Fred Meyer
Winco

Just for starters. That would be about $400-$450 a year just for the right to shop, and to keep the business model profitable they would still have to close over half their locations.

Now lets talk about some of the other large retail chains

Kohls
Staples
Office Depot
Home Depot
Lowes
Sears
Kmart
Walgreens
Macy's
Rite Aid
Whole Foods
Nordstroms
Gap
JC Penny
Bed Bath & Beyond
Ross
Trader Joes
Dollar Tree
Auto Zone
O'Rielly
Toys R Us
Dick's
Pet Smart
Petco
Foot Locker
Big Lots
Ikea

Just to name a few. How many of those stores would have to adopt Costco like memberships to afford to keep prices competitive and absorb the huge labor rate hikes? How many stores would you be willing to pay a membership to in order to shop there?

We don't need to raise minimum wage, we need to find ways to lower cost of living and taxes, which puts more money back in the worker's pocket. Medical, education, and in some areas housing cost has grown out of control.

 

I am not clear what I can do to help you.

First I have yet to endorse or hate the Costco model. It works for them. And judged by the millions of shoppers who buy the membership believing they get great value, who am I to call them wrong.

I suppose if the big chains used the model, prices would have fall for products.

COSTCO operates on probably the slimmest margin of profit feasible.

 

I've already answered this

 

15 dollars a hour in California is not the same as 15 dollars a hour in Georgia.

So the ones of you acting like a federally mandated minimum wage means anything are up s--- creek.

 

A high minimum wage is a temporary "fix". The residential real estate market would mitigate it. It exerts downward pressure on the rent of commercial land and upward pressure on rent of residential land.

 

No, you didn't. You were simply full of fallacy. Thank you for ceding the point and the argument.

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so what. equality is a social concept. and, fifteen dollars an hour helps Labor achieve their goals, sooner rather than later.

 

I'm not trying to argue. Costco works at higher wages. Costco gives many consumers a good option to shop at.

im just presenting a counter argument to the people that say because Costco can do it than other businesses can too. It's simply not true. And even if everyone could follow the Costco business model I don't think that's a good market for consumers.

 

You have no idea how silly what you just said is?

 

I am not arguing that the rest can do the same thing.

I am not up on this sort of thing but I wonder how those other stores you named are faring.

 

Ya, I didn't think we really had any opposing view points on the subject.

Depends who you ask, some are a disaster (Kmart & Sears), others were recently struggling to be profitable (Best Buy, JC Penny, Kohls) and others are doing ok. With changes in minimum wage we'll start to see companies doing just ok have to quickly respond to increased overhead though by immediately cutting back hours & raising prices where they can.

I've lived my entire life in retail & sales. Anyone who's worked for one of these large box stores in any meaningful, long term way can tell you what happens when push comes to shove with profitability. Labor is the first thing they scale back. Typically the guy making $13-$17 per hour would get laid off and they'd hire a guy to replace him at $9.50. That won't be possible for minimum wage increases (They won't lay off someone making $15 to hire someone at $15) so they'll simply scale back hours. Force more people into part time.

Doctors and medical professionals warned the public what would happen to the cost of health care & the options available when it came to Obamacare. I'm giving the same warning in retail when it comes to minimum wage hikes this extreme.

 

The fact is that you are either ignorant of all the facts or are willfully ignorant. Pay attention to the following:

Craig Jelinek, president and CEO of the retail giant Costco, has emerged as the most prominent advocate of the Harkin-Miller bill. Jelinek’s company is known for its relatively generous pay scale, with employees starting out at $11.50 per hour or higher.

The higher pay is worth it to the company because employees are motivated to work harder and stick with the company, Jelinek says. Now he is arguing that all businesses would see a similar benefit from a national minimum wage increase. “Instead of minimizing wages, we know it’s a lot more profitable in the long term to minimize employee turnover and maximize employee productivity, commitment and loyalty,” he says. [Demos, 3/11/13]

The central finding of this report is that the majority of America's lowest-paid workers are employed by large corporations, not small businesses, and that most of the largest low-wage employers have recovered from the recession and are in a strong financial position.

Specifically:

The majority (66 percent) of low-wage workers are not employed by small businesses, but rather by large corporations with over 100 employees;

The 50 largest employers of low-wage workers have largely recovered from the recession and most are in strong financial positions: 92 percent were profitable last year; 78 percent have been profitable for the last three years; 75 percent have higher revenues now than before the recession; 73 percent have higher cash holdings; and 63 percent have higher operating margins (a measure of profitability) - all after adjusting for inflation;

Top executive compensation averaged $9.4 million last year at these firms, and they have returned $174.8 billion to shareholders in dividends or share buybacks over the past five years.

[National Employment Law Project, July 2012]


Washington is really overperforming on employment growth," said Ahu Yildirmaz, head of research for ADP, a payroll services company.

Nationwide, employment and wages both increased by 2.1 percent year-over-year during the fourth quarter of 2015.

In Washington, however, employment climbed by 3.7 percent. Much of that came from hiring in construction, information technology, professional services, and leisure and hospitality industries.

[...]

In sectors such as in retail and hospitality, some employers in the region are raising wages for managers in response to recent minimum-wage bumps in Seattle and SeaTac, said Sage Wilson, spokesperson for Working Washington, an advocacy organization.

Anecdotally, Wilson has heard of employers outside of those cities finding that they must match higher wages to compete for employees. The minimum-wage increases, however, are relatively new and could take years before they significantly impact statewide data. [The Seattle Times, via Media Matters, 2/15/16]

There's more....but I'll wait for YOU to produce something other than your repetitive personal opinion supposition and conjecture mantra.

 

So you CANNOT DISPROVE THE HIGHLIGHTED PORTION OF MY RESPONSE, and offer nothing but a hypothetical followed by your supposition and conjecture. Here's how I explained it to your like minded compadre: http://www.politicalforum.com/showthread.php?t=453983&p=1066552336#post1066552336

 

Ahhh, but Walmat's massive expansion DEPENDS upon sub-par wages for it's employees AND assistance from local gov't in terms of tax breaks.

 

I don't deny that real GDP per capita has steadily increased.

However, that has nothing to do with the law of supply and demand. Ceteris paribus, if a price floor is set above the equilibrium price, a surplus will be the result. Those who advocate a price floor are advocating for surplus labor.

 

You can repeat that mantra of yours until doomsday....however, the FACTS that I provided to another poster contradicts the insinuated results of your myopic analysis. Observe: http://www.politicalforum.com/showthread.php?t=453983&p=1066552336#post1066552336

 

Do you know what ceteris paribus means?

If you'd like to go on record as wishing to ignore economic science, that's fine with me. I can only tell you what economic science says.

Also, giant corporations are typically supporters of regulations, including minimum wage regulations. They have the economies of scale to absorb the hit, and the regulations help to put their smaller competitors out of business.

Kudos on your support for Big Corp.

 

projecting much? i am the one with an argument, not diversion.

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The point is, that if the other business have nothing going for them other than cheap labor, they might as well fail sooner rather than later.

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Just goes to "prove" that capitalists don't value or appreciate, a historical work ethic from the Age of Iron.