A Liberal Video on Walmart and the Minimum Wage that Made Me Think

[HenryBHough]

Not a communist you moron.

Sufficient until something even better happens along.

 

[SAYIT]

The REASON we need programs for the poor is because people like YOU and your scum bag politicians REFUSE to give a minimum wage raise. Its amazing you don't blink an eye at a CEO making 10,000$ an hour yet throw a fit over workers want 10$ an hour. Fucking hypocrites.

Interesting that in six years in power, the scum bag liberal politicians, Obama, Pelosi, Reid and company, who have controlled the federal government haven't done your bidding. Wonder why. A bit too cozy with those 10K per hour CEOs and not the oppressed Proletariat?

Urban Dictionary:
Urban Dictionary: El diablo blanco

El diablo blanco

Spanish for “The White Devil”
Often abbreviated to “Diablo Blanco.”

A broad racial slur used to show dislike of any Caucasian.

Most often used by Hispanic and other Spanish speaking people, although not normally by people from Spain itself, as they are considered white themselves.

Correct. I am white though so. It's like Americans calling themselves Infidels. Its making a mockery or a badge of honor. I named my truck that so I just used it here.

Shut up shithead. Wasn't talking to you in the first place. Talking to Rabbi who can't seem to focus worth a shit. The REASON we need programs for the poor is because people like YOU and your scum bag politicians REFUSE to give a minimum wage raise. Its amazing you don't blink an eye at a CEO making 10,000$ an hour yet throw a fit over workers want 10$ an hour. Fucking hypocrites.

So if we raise the min wage we wont need programs for the poor?

We will still need them but not as many people would need them. The big companies need put under control and kept there. They are out of control and will do whatever they want they figure as now they can just pad the pockets of a few politicians and there ya go...back to doing whatever they please. We need to set up a Guillotine and start chopping heads off...make the French revolution look tame.

Yeah, yeah ... Sieg Heil, Bubba, Sieg Heil.

 

[OKTexas]

Correct. I am white though so. It's like Americans calling themselves Infidels. Its making a mockery or a badge of honor. I named my truck that so I just used it here.

We will still need them but not as many people would need them. The big companies need put under control and kept there. They are out of control and will do whatever they want they figure as now they can just pad the pockets of a few politicians and there ya go...back to doing whatever they please. We need to set up a Guillotine and start chopping heads off...make the French revolution look tame.

Actually more people will need them. Because companies will either lay off lower paid workers, finding ways not to have to use them, or they will go out of business due to higher labor costs.

Your violent fantasies against people who have been more successful than you are troubling. You need to see a doctor.

Actually I already showed more than once how Washington State has the highest min wage in the country and is in a economic BOOM not a BUST but a BOOM...tell me why since they raised the min wage more people are hiring.

Just facts my boy.

That money is being made off of the backs of hard working Americans. So yeah they are ALL entitled to it and should use force if need be to get it back. Let the bastard Walton's see how it is wondering how the rent is gonna get paid or the electric bill paid.

Fuck you, you're nothing but a leach. The Waltons put up their hard earned money to help Sam Walton start that company from one store, I'm very sure they wondered if that investment would ever pay off in the early days. Now that they have realized the American dream you think you have a right to steal it from them. How about you just go out, round up some investors, and build your own dream? Or are you just too stupid to do that and it's much easier to hire politicians to steal it for you? You're the problem with country, not the Waltons.

LMAO NONE of those Walton's did a DAMN thing to help Sam Walton build Wal Mart they were merely lucky enough to be born a Walton. That's all. Man I fucking hate people like you.

You seem to hate anyone that can make their own way, I'm sorry you lack the balls to do the same. Got to have uncle sugar carry the load for you, 30 years old and have yet to become a man, what do you plan to do if you ever grow up? I'm really surprised you can keep a woman, most don't like spineless pussies like you. Tell me, who do you blame when you refuse to get your worthless ass out of bed to look for a job, is there a local rich guy for you to blame? Fuck of baby boy I'm done with you.

 

[FireFly]

Cocksucker....inflation is caused by raising the wages of workers.

Unless a product becomes scarce, it should remain stable in price given other factors are not changed e.g. wages.

An example for you dumbfuck....farmer Bob produces 1 million gallons of milk on his farm. He can sell his milk at the same price or close to it given he made a profit, unless he has to pay more for shipping his milk or pay more for his workers to get the milk from the cows. Shipping and labor costs are affected by rising wages.

You win the dumbest post in the thread award.

Inflation is caused by fractional reserve lending & printing money. It has never been caused by raising minimum wage in the USA. Consumer loans, home loans, student loans, etc to underpaid workers cause inflation. So does government printing money or creating debt to support millions of minimum wage workers earning below the poverty line.

Raising minimum has always been deflationary & creates more jobs.

You understand your chart says the exact opposite of what you've posted, right?

Everyone understands how stupid you are. The larger pay hikes slowed the dollars decline.

 

[SAYIT]

Not a communist you moron.

Clearly you are, comrade:

"That money is being made off of the backs of hard working Americans. So yeah they are ALL entitled to it and should use force if need be to get it back."

"The big companies need put under control and kept there."

 

[The Rabbi]

You win the dumbest post in the thread award.

Inflation is caused by fractional reserve lending & printing money. It has never been caused by raising minimum wage in the USA. Consumer loans, home loans, student loans, etc to underpaid workers cause inflation. So does government printing money or creating debt to support millions of minimum wage workers earning below the poverty line.

Raising minimum has always been deflationary & creates more jobs.

You understand your chart says the exact opposite of what you've posted, right?

Everyone understands how stupid you are. The larger pay hikes slowed the dollars decline.

You're saying this to see if I can tell how stupid you are?
The graph shows that as the min wage increased, purchasing power decreased. I dont know one caused the other or they were caused by some third factor, but that's what the chart shows.

 

[The Rabbi]

Not a communist you moron.

Clearly you are, comrade:

"That money is being made off of the backs of hard working Americans. So yeah they are ALL entitled to it and should use force if need be to get it back."

"The big companies need put under control and kept there."

Dont forget he wants to bring back the guillotine.

 

[williepete]

The big companies need put under control and kept there.

We need to set up a Guillotine and start chopping heads off...make the French revolution look tame.

I admire the passion you have for this subject but I find the methods you propose to be a bit at odds with a free society.

Who or what is to bring companies "under control" and keep them there? Who or what is the "We" who will wield this power over the private property of free individuals?

I find it chilling that anyone who is aware of the French Revolution would advocate repeating it on a larger scale. Just how did that work out for the French? How did the successive waves of terror promote Liberté, Egalité, Fraternité? When The Terror tore the French nation down to its knees, it became ripe for the rise of a tyrant. How did that work out for the French people?

And you're suggesting "We" do this on a much larger scale? Do you also envision a much larger tyrant to step into the vacuum produced by this much larger bloodbath? Anyone particular in mind?

“Among those who dislike oppression are many who like to oppress.”
―Napoleon Bonaparte

“The life of a citizen is the property of his country.”
―Napoleon Bonaparte

 

[Zombie_Pundit]

It would be better if Walmart and other low wage employers corrected this problem themselves. It would be advantageous to Walmart in many respects to find some creative reorganization to increase wages. They could implement new ranks with new pay grades, recognition of seniority, relatively substantial cash bonuses for star employees, etc... This would do wonders for their public image, greatly increase retention of the best employees, and might even result in a higher volume of sales.

Unfortunately, Walmart is not demonstrating the prescience of Henry Ford. There is a wonderful article in Forbes on this subject.
"Would Henry Ford Double His Workers' Wages Today?"

You need to go immediately to Bentonville and make a presentation to WalMart's executives on your brilliant plan: raise labor costs dramatically so their employees can buy WM products.
Where do you suppose WM employees shop today? The dumpster?
But damned are you one ignorant mo-fo.

The plan, which you obviously didn't bother to read or you wouldn't confuse your straw man for reductio ad absurdum, belongs to Henry Ford (or perhaps James Couzens). I never claimed authorship and explicitly gave proper credit. Therefore, by extension, it is Henry Ford (or perhaps James Couzens) that you consider an "ignorant mo-fo".

As for the "need" to make a presentation to the executives of Walmart, I trust they have at least one subscription to Forbes magazine.

 

[Remodeling Maidiac]

Have the liberal wussies decided it's time to boycott Walmart again?

 

[williepete]

As for the "need" to make a presentation to the executives of Walmart, I trust they have at least one subscription to Forbes magazine.

"Would Henry Ford Double His Workers' Wages Today?" He would if he had retention problems. If you go to the Forbes page I linked, you'll see there are several links within this article that help flesh out Ford's reasoning.


The Story of Henry Ford's $5 a Day Wages: It's Not What You Think
FORBES MAGAZINE

There’s an argument you see around sometimes about Henry Ford’s decision to pay his workers those famed $5 a day wages. It was that he realised that he should pay his workers sufficiently large sums to that they could afford the products they were making. In this manner he could expand the market for his products.

It should be obvious that this story doesn’t work: Boeing would most certainly be in trouble if they had to pay their workers sufficient to afford a new jetliner. It’s also obviously true that you want every other employer to be paying their workers sufficient that they can afford your products: but that’s very much not the same as claiming that Ford should pay his workers so that they can afford Fords.

So, if creating that blue collar middle class that could afford the cars wasn’t why Ford brought in his $5 a day wages, what was the reason?

Actually, it was the turnover of his staff.

“At the time, workers could count on about $2.25 per day, for which they worked nine-hour shifts. It was pretty good money in those days, but the toll was too much for many to bear. Ford’s turnover rate was very high. In 1913, Ford hired more than 52,000 men to keep a workforce of only 14,000. New workers required a costly break-in period, making matters worse for the company. Also, some men simply walked away from the line to quit and look for a job elsewhere. Then the line stopped and production of cars halted. The increased cost and delayed production kept Ford from selling his cars at the low price he wanted. Drastic measures were necessary if he was to keep up this production.

That level of turnover is hugely expensive: not just the downtime of the production line but obviously also the training costs: even the search costs to find them. It can indeed be cheaper to pay workers more but to reduce the turnover of them and those associated training costs. Which is exactly what Ford did. As Paul Krugman points out, the effects are obvious:

“But in any case there is a fundamental flaw in the argument: Surely the benefits of low turnover and high morale in your work force come not from paying a high wage, but from paying a high wage “compared with other companies” — and that is precisely what mandating an increase in the minimum wage for all companies cannot accomplish.

While that’s talking about the living wage argument it applies here as well. The point is not so as to be paying a “decent wage” or anything of that sort: it is to be paying a higher wage than other employers. That gets your workforce thinking they’ve got a good deal (for the clear reason that they have got a good deal) and if the workers think they’ve got a good deal then they’re more likely to turn up on time, sober, and work diligently. They’re more likely to turn up at all which was one of the problems Ford was trying to solve.

It’s also not true that the offer was of $5 a day in wages. It was all rather more complicated than that:

“The $5-a-day rate was about half pay and half bonus. The bonus came with character requirements and was enforced by the Socialization Organization. This was a committee that would visit the employees’ homes to ensure that they were doing things the “American way.” They were supposed to avoid social ills such as gambling and drinking. They were to learn English, and many (primarily the recent immigrants) had to attend classes to become “Americanized.” Women were not eligible for the bonus unless they were single and supporting the family. Also, men were not eligible if their wives worked outside the home.

Outside of the military it’s difficult to think of an American workforce that would be willing to accept such paternalism even if wages were doubled today.

So it wasn’t $5 a day and it was done actually to reduce total labour costs by reducing labour turnover. And as a final nail in the coffin of the argument that it was done so that the workers could afford the cars, there’s this.

Car production in the year before the pay rise was 170,000, in the year of it 202,000. As we can see above the total labour establishment was only 14,000 anyway. Even if all of his workers bought a car every year it wasn’t going to make any but a marginal difference to the sales of the firm.

We can go further too. As we’ve seen the rise in the daily wage was from $2.25 to $5 (including the bonuses etc). Say 240 working days in the year and 14,000 workers and we get a rise in the pay bill of $9 1/4 million over the year. A Model T cost between $550 and $450 (depends on which year we’re talking about). 14,000 cars sold at that price gives us $7 3/4 million to $6 1/4 million in income to the company.

It should be obvious that paying the workforce an extra $9 million so that they can then buy $7 million’s worth of company production just isn’t a way to increase your profits. It’s a great way to increase your losses though.

The reason for the pay rise was not as some of our contemporaries seem to think it was. It was nothing at all to do with creating a workforce that could afford to buy the products. It was to cut the turnover and training time of the labour force: for, yes, in certain circumstances, raising wages can reduce total labour costs.
LINK:
The Story of Henry Ford's $5 a Day Wages: It's Not What You Think - Forbes

 

[OKTexas]

As for the "need" to make a presentation to the executives of Walmart, I trust they have at least one subscription to Forbes magazine.

"Would Henry Ford Double His Workers' Wages Today?" He would if he had retention problems. If you go to the Forbes page I linked, you'll see there are several links within this article that help flesh out Ford's reasoning.


The Story of Henry Ford's $5 a Day Wages: It's Not What You Think
FORBES MAGAZINE

There’s an argument you see around sometimes about Henry Ford’s decision to pay his workers those famed $5 a day wages. It was that he realised that he should pay his workers sufficiently large sums to that they could afford the products they were making. In this manner he could expand the market for his products.

It should be obvious that this story doesn’t work: Boeing would most certainly be in trouble if they had to pay their workers sufficient to afford a new jetliner. It’s also obviously true that you want every other employer to be paying their workers sufficient that they can afford your products: but that’s very much not the same as claiming that Ford should pay his workers so that they can afford Fords.

So, if creating that blue collar middle class that could afford the cars wasn’t why Ford brought in his $5 a day wages, what was the reason?

Actually, it was the turnover of his staff.

“At the time, workers could count on about $2.25 per day, for which they worked nine-hour shifts. It was pretty good money in those days, but the toll was too much for many to bear. Ford’s turnover rate was very high. In 1913, Ford hired more than 52,000 men to keep a workforce of only 14,000. New workers required a costly break-in period, making matters worse for the company. Also, some men simply walked away from the line to quit and look for a job elsewhere. Then the line stopped and production of cars halted. The increased cost and delayed production kept Ford from selling his cars at the low price he wanted. Drastic measures were necessary if he was to keep up this production.

That level of turnover is hugely expensive: not just the downtime of the production line but obviously also the training costs: even the search costs to find them. It can indeed be cheaper to pay workers more but to reduce the turnover of them and those associated training costs. Which is exactly what Ford did. As Paul Krugman points out, the effects are obvious:

“But in any case there is a fundamental flaw in the argument: Surely the benefits of low turnover and high morale in your work force come not from paying a high wage, but from paying a high wage “compared with other companies” — and that is precisely what mandating an increase in the minimum wage for all companies cannot accomplish.

While that’s talking about the living wage argument it applies here as well. The point is not so as to be paying a “decent wage” or anything of that sort: it is to be paying a higher wage than other employers. That gets your workforce thinking they’ve got a good deal (for the clear reason that they have got a good deal) and if the workers think they’ve got a good deal then they’re more likely to turn up on time, sober, and work diligently. They’re more likely to turn up at all which was one of the problems Ford was trying to solve.

It’s also not true that the offer was of $5 a day in wages. It was all rather more complicated than that:

“The $5-a-day rate was about half pay and half bonus. The bonus came with character requirements and was enforced by the Socialization Organization. This was a committee that would visit the employees’ homes to ensure that they were doing things the “American way.” They were supposed to avoid social ills such as gambling and drinking. They were to learn English, and many (primarily the recent immigrants) had to attend classes to become “Americanized.” Women were not eligible for the bonus unless they were single and supporting the family. Also, men were not eligible if their wives worked outside the home.

Outside of the military it’s difficult to think of an American workforce that would be willing to accept such paternalism even if wages were doubled today.

So it wasn’t $5 a day and it was done actually to reduce total labour costs by reducing labour turnover. And as a final nail in the coffin of the argument that it was done so that the workers could afford the cars, there’s this.

Car production in the year before the pay rise was 170,000, in the year of it 202,000. As we can see above the total labour establishment was only 14,000 anyway. Even if all of his workers bought a car every year it wasn’t going to make any but a marginal difference to the sales of the firm.

We can go further too. As we’ve seen the rise in the daily wage was from $2.25 to $5 (including the bonuses etc). Say 240 working days in the year and 14,000 workers and we get a rise in the pay bill of $9 1/4 million over the year. A Model T cost between $550 and $450 (depends on which year we’re talking about). 14,000 cars sold at that price gives us $7 3/4 million to $6 1/4 million in income to the company.

It should be obvious that paying the workforce an extra $9 million so that they can then buy $7 million’s worth of company production just isn’t a way to increase your profits. It’s a great way to increase your losses though.

The reason for the pay rise was not as some of our contemporaries seem to think it was. It was nothing at all to do with creating a workforce that could afford to buy the products. It was to cut the turnover and training time of the labour force: for, yes, in certain circumstances, raising wages can reduce total labour costs.
LINK:
The Story of Henry Ford's $5 a Day Wages: It's Not What You Think - Forbes

Yep, Ford would not be allowed to do what he did because of all the strings he attached. The ignorant have no idea of the control he exerted on those folks to get that pay.

 

[Zombie_Pundit]

Yep, Ford would not be allowed to do what he did because of all the strings he attached. The ignorant have no idea of the control he exerted on those folks to get that pay.

"There is one rule for the industrialist and that is: Make the best quality of goods possible at the lowest cost possible, paying the highest wages possible."
Henry Ford


In the interest of fairness we must note that many industrialists at the time exerted significant, "paternalistic," control over their employees before the advent of modern labor laws.

"...if Bryan is elected tomorrow the whistle will not blow Wednesday morning."
Steinway Piano Works, 1896

 

[williepete]

In the interest of fairness we must note that many industrialists at the time exerted significant, "paternalistic," control over their employees before the advent of modern labor laws.

Good historical point. Well noted.

"Paternalistic".

 

[OKTexas]

Yep, Ford would not be allowed to do what he did because of all the strings he attached. The ignorant have no idea of the control he exerted on those folks to get that pay.

"There is one rule for the industrialist and that is: Make the best quality of goods possible at the lowest cost possible, paying the highest wages possible."
Henry Ford


In the interest of fairness we must note that many industrialists at the time exerted significant, "paternalistic," control over their employees before the advent of modern labor laws.

"...if Bryan is elected tomorrow the whistle will not blow Wednesday morning."
Steinway Piano Works, 1896

Exactly, Ford was an industrialist, he manufactured which required a skilled labor force, and the price of constant turnover was killing the business because of the training time.

You can't apply the same principles to no or low skilled workers, it simply does not compute, because there is practically no training investment. And what's really funny, today's minimum wage workers would have a shit fit if an employer demanded a simple drug test, imagine if any employer wanted to inspect their home for wholesomeness.

 

[Remodeling Maidiac]

Yep, Ford would not be allowed to do what he did because of all the strings he attached. The ignorant have no idea of the control he exerted on those folks to get that pay.

"There is one rule for the industrialist and that is: Make the best quality of goods possible at the lowest cost possible, paying the highest wages possible."
Henry Ford


In the interest of fairness we must note that many industrialists at the time exerted significant, "paternalistic," control over their employees before the advent of modern labor laws.

"...if Bryan is elected tomorrow the whistle will not blow Wednesday morning."
Steinway Piano Works, 1896

Exactly, Ford was an industrialist, he manufactured which required a skilled labor force, and the price of constant turnover was killing the business because of the training time.

You can't apply the same principles to no or low skilled workers, it simply does not compute, because there is practically no training investment. And what's really funny, today's minimum wage workers would have a shit fit if an employer demanded a simple drug test, imagine if any employer wanted to inspect their home for wholesomeness.

If any customer of mine wanted to "check my home" for anything I'd laugh him/her to never land.

 

[Zombie_Pundit]

Exactly, Ford was an industrialist, he manufactured which required a skilled labor force, and the price of constant turnover was killing the business because of the training time.

You can't apply the same principles to no or low skilled workers, it simply does not compute, because there is practically no training investment. And what's really funny, today's minimum wage workers would have a shit fit if an employer demanded a simple drug test, imagine if any employer wanted to inspect their home for wholesomeness.

So let's clear up some misconceptions...

Walmart is not some great evil. It is just a retail chain. There's a wonderful Penn&Teller episode I would recommend. Nor is Walmart governed by some infallible "job-creator" supermen. It is just a retail chain taking advantage of arbitrage.

Walmart does require a drug test as a condition of employment. There is some training involved, as with any employment. The amount of training would depend on the specific job requirements. Walmart does invest employees, and even seeks to integrate low paid immigrants into American society. For example, Walmart participates in Workplace ESL classrooms.

Walmart suffers a 70% turnover rate in the first year of employment, and this is obviously a loss.

It is the transient nature of arbitrage that limits the lifespan of Walmart, not the 70% turnover rate.

When profits are high, it is easy to overlook inefficiencies in the system. As profits decrease, we may then start to see Walmart get serious about reducing the turnover rate.

 

[Zombie_Pundit]

In the interest of fairness we must note that many industrialists at the time exerted significant, "paternalistic," control over their employees before the advent of modern labor laws.

Good historical point. Well noted.

"Paternalistic".

19th and early 20th century paternalism aside, increased wages do not always result in increased cost. I doubt Wartzman was arguing that increasing wages requires paternalism. I think he was trying to pick out facts from the fiction surrounding a very famous wage increase that did shock Ford's contemporaries.

This thread had degenerated into two sides shouting absolutes at one another. I'm glad to see the thread returning to a more reasonable volume.

 

[williepete]

I'm glad to see the thread returning to a more reasonable volume.

 

[Kondor3]

Thoughts? Mine are DUH! We have been saying this for a while. Republicans thoughts: Damn leeches! Ought to be happy they have a job! BLACKMAIL!

See the next one small fry. Too many of you only what to look at one side of the coin. If Walmart (which doesn't give the lowest wages in the industry), supposedly would only charge $0.01 more. Than why is Costco much more expensive than it's competitors, even though it has a membership fee revenue stream most of it's other competitors don't have?

Beats me. Why does Sams club which is owned by wal mart do the same thing? They are members only and have high prices as well on some stuff. Choice I suppose.They can have higher prices so they do.

Sams' Club and CostCo have higher prices?

Higher prices than whom?

Per serving or per unit-of-measure, they have very low prices, do they not?