Reader Paul Kelleher sends in a news story that is curiously and exclusively pro-WM.
Mark Coyle of the Glendale Star doesn't look for opposing viewpoints at all, and focuses exclusively on the information provided by Wal-Mart and a discussion with the manager of a local WM Supercenter:
One of those success stories can be found at the Wal-Mart Supercenter at 5605 W. Northern Ave. in Glendale.Mr. Kelleher objects that "full-time" is not actually 40 hours a week, and that the benefits quoted are rather vague. Anecdotal evidence suggests to me that in some areas of the country, Wal-Mart does have a short full-time week, but I cannot perceive a general pattern. Even discussants at Democratic Underground have noted that full-time was 40 hours when many worked at WM.Manager David Hakhamian said he began working for the company in 1988 as a cart pusher. He eventually moved to different areas, including receiving, sales floor, cashier, department manager, assistant manager and co-manager. He has been a store manager since 1994 and has a goal of becoming a district manager someday.
Hakhamian said the negative criticism about the company is not true. He said the wages are very competitive and in most cases, are above what similar retail stores are offering.
"I am a living example of how Wal-Mart allows for growth," he said. "I have seen both sides of the story and I can tell you that Wal-Mart is the place if you are looking for a career where you can stay with a company that will take care of you; Wal-Mart is the place."
Hakhamian said his store has about 580 employees and nearly 85 to 90 percent are full time and qualify for full-time benefits. He said a number of part-time employees are also offered benefits throughout the company.
Scott's letter said that benefits "include healthcare insurance with lifetime maximum. Associate premiums begin at less than $40 per month for an individual and less than $155 per month for a family, no matter how large.
"Other benefits include a profit/sharing/401(k) plan, merchandise discounts, company-paid life insurance, vacation pay and pay differential for those in active military service. More than half of our associates own company stock through our associate purchase plan."
Hakhamian said he is proud to be working for the company that he one day plans to finish his career with.
"During my 17 years with Wal-Mart, I have developed through this company and it has given me the opportunity to move up the level that I am in," he said. "I have had a number of different companies that tried to recruit me, but I knew from the bottom of my heart that this is the place that I want to retire from."
Posted by Kevin on January, 28 2005 at 12:12 PM
Matt wrote:While I was at corporate, technical full-time was 36.5 hours per week to qualify for benefits in the stores. It was mostly set that way as padding. If you schedule someone for five 8 hour shifts the likeliehood of them running into overtime is somewhat greater than if you leave a few hours of padding in case of the employee being needed for some extra time.
I really don't see anything terribly sinister in it.
On the other hand, WM's insurance (they self insure) sucks at just about every level, whether you are an hourly employee in a store or in management at corporate.
-- January 28, 2005 12:28 PM ∞
Paul wrote:The 34 hour work-week becomes most important in conjunction with the poor wages at wal-mart. The article claims that average wages are "almost twice the federal minimum wage." Well, the mimimum wage's purchasing power peaked in 1968, and is unjustly low. "Almost twice" certainly doesn't make up for the injustice. Sure, a 34 hour week means little morally when workers are salaried at decent levels, but these workers are not. Combined with WM's avoidance at all costs of paying overtime, the pared down work-week leads more into the category of the "working poor."
-- January 28, 2005 12:54 PM ∞
Kevin Brancato wrote:Paul,
I'm going to be controversial.
I don't see anything morally wrong in being a person who is part of the "working poor", hence I don't see anything morally wrong with employing somebody who is. I "employ" such people by having pizza and chinese food delivered to my home; there is nothing wrong with paying a man $7 an hour to stock shelves or to grill hamburgers.
Although it has been overtaken in many areas by higher state and local minimum wage laws, I must agree that the federal minimum wage has lost it's oomph. But I'm happy about that. In so much as minimum-wages are effective, they create unemployment and under-the-table employment, lower wages for those that would have been slightly above the minimum, in addition to the bubble of employed at slightly higher wages than they would have been.
Let's look at some real numbers, all in constant 2004 dollars. The fed minimum wage is $5.15 an hour. The average FULL-TIME WM worker earned $9.68 in 2004. But, at its peak in 1968, the minimum wage was about $7.30 an hour. So, WM wages are about 30% higher than the highest real federal minimum wage ever.
If claims of economic justice are not to be relative, then an absolute minimum real income must be defined once and for all. Is that $7.30 in 2004 dollars? Clearly you don't think $9.68 is enough, so $7.30 is not enough either. How much more?
Those who advocate for the "working poor" steadfastly refuse to say how much is truly a minimum.
I haven't seen proof of this, but say the 34 hour week is standard now for WM, when it should be 40. What does that imply about WM's weekly wages compared to the highest mininum wage ever? A 40 hour week at that highest minimum wage of $7.30 would yield $292 a week. A 34 hour week at $9.68 yields $329 a week. So WM provides a ~10% higher real WEEKLY wage than the highest ever federal mininum, and does so by requiring employees to work 6 hours or 15% (6/40) less.
Why is this unjust?
-- January 28, 2005 01:35 PM ∞
Paul wrote:Kevin,
Those points certainly do a good job of getting an important discussion started. I fear I won't be able to do justice to them. But I appreciate the thoughtful way you set them out; I hope you don't find disrespect in the matter-of-fact way in which I try to begin answering them: I'm just trying to be efficient.
1. I don't see anything morally wrong in being a person who is part of the "working poor"...
I hope I didn't imply that I find anything wrong with it either. Indeed, my concern was for the working poor.2. I "employ" such people by having pizza and chinese food delivered to my home; there is nothing wrong with paying a man $7 an hour to stock shelves or to grill hamburgers.
When you pay the delivery guy, you indeed give him money. But that money (not including tip) is not his to keep: it's his boss's. You do not make a profit off the work of the delivery guy, his boss does.But this point does indeed start to get to the heart of the matter. While it is sometimes impossible--or very difficult--to determine the wages paid by business in your area, if one knows that a pizza joint, say, pays povert-level wages, one might consider buying elsewhere. This would be the sort of response that Milton Friedman might applaud. His first chapter of _Capitalism and Freedom_ admonishes that if you wish to effect change, you use the market to do it. If you need funding to get a political movement off the ground, you search out a rich person who's got sympathy with it. Similarly, if you wish to raise the wages that businesses in your area pay, shop--and get your friends to shop--at those business that pay higher wages.
Now I have doubts that the sort of movements that "living-wage" partisans favor can effectively be furthered in this regard. But it does suggest one conception of an ideal that might lead one to think that it's not, in some cases, perfectly fine to "employ" (in your sense) a delivery guy whose employer pays poverty-level wages.
All I wish to establish here is the rough plausibility of a view that says it might not be OK at all times to "employ" the delivery guy, in your sense. This will have nothing to do with the delivery guy himself--indeed, it is he that you are concerned with.
3. In so much as minimum-wages are effective, they create unemployment and under-the-table employment, lower wages for those that would have been slightly above the minimum, in addition to the bubble of employed at slightly higher wages than they would have been.
I find these propositions dubious. While it is true businesses will have to reasonably expect a profit before they venture their capital, I don't see why I should believe that raising the minimum wage should necessarily create unemployment. Why should I believe that a company that made $9 billion last year would not have still made a profit if the minimum wage had been, say, $12/hour?You may well be right that a higher minimum wage will increase the temptation to pay some under the table. But if we were already committed to the ideal of a higher minimum wage, then we'd have to devise strategies to deal with the untoward consequences the policy gave rise to. But we deal with tax evaders (not enough in my opinion, though), and we place cameras to catch people who run toll-booths. We do these things in order to enforce policies we think are right. And we would do the same for the consequences of a minimum wage.
I'm not sure about your claim that we'd lower wages for those that would have been slightly above the minimum. Why think they would have been above it in the first place? At any rate, if we do in fact alight upon a moral minimum, then perhaps we won't have good moral reason to be concerned that those who would have above the minimum are in fact not above it. But I'm not sure I fully understand this point, so I'm sorry if this isn't a good response.
4. If claims of economic justice are not to be relative, then an absolute minimum real income must be defined once and for all. Is that $7.30 in 2004 dollars? Clearly you don't think $9.68 is enough, so $7.30 is not enough either. How much more?
This point, as you say, really goes to the heart of important issues of economic justice (if there really is such a subject matter--many think there's not; I think there is). I disagree with you on this one, for a couple of reason. First, as to the requirements of objectivity: I don't see why objective standards of justice must be as specific as you want them to be. I think that I morally should give some of my money to charities that help the poorest in the world. And I think that this is a moral requirement that is incumbent upon me no matter what I believe about it: it's objective. But I don't think that there is some absolute level that morality requires me to give. I think it requires me to go without some of the luxuries and frills I might otherwise indulge in, but I don't see any reason why I should think there is some specific amount of sacrifice (if it can be called that) that is required of me. I think a general disposition to respond to neediness as such in certain morally attentive ways is sufficient.I think similar points can be made about a minimum wage. It misunderstands the moral push toward a minimum wage to think those who are for it are pushing for some specific amount of money or level of well-being. To be sure, those who advocate a "living wage" believe that just members of a just state will ensure that no one who's willing to work and cooperate in its economic scheme ought to, for instance, go hungry. Others think parents should be able to send their children to school in decent, clean clothes, instead of rages. Others think everyone ought to be able to take a relaxing vacation--nothing tropical, just a relaxing getaway from workaday life.
My point is that these are all moral criteria that one's theory of justice will lead one to expect all jobs in the state to satisfy. And I think these moral criteria can be defended in a way that speaks to their objectivity, but which doesn't pretend that moral requirements need to be adorned with dollar signs and decimal points. Money is good for what it can do, it's not an end in itself (as we all know).
So I don't think that the search for the "true minimum" needs as much specificity as you suggest. But I do think it needs to be somewhat specific, and advocates for "living wages" do have something more specific than you seem to think they do. As just one example, Tompkins County Living Wage Coalition in Ithaca, NY sets out some moral criteria they believe all corporations' jobs must satisfy.
Now you would be right to demand more by way of substantive moral argument before you bought anyone's story defending a living wage. But I don't see reason to think that such an objective moral story doesn't exist. Indeed, I'm hard at work trying to write a dissertation setting out some foundational moral issues that I take to bear on the nature of a just political economy. And the questions you raise are the one's I need to know better how to answer. So I'm glad for your site, and for the respectful way you set out to further the discussion.
--Paul
-- January 28, 2005 10:06 PM ∞
Brandon Berg wrote:When you pay the delivery guy, you indeed give him money. But that money (not including tip) is not his to keep: it's his boss's. You do not make a profit off the work of the delivery guy, his boss does.
Of course you make a profit. You had money, now you have pizza. You prefer the new state of affairs to the old one. That's profit. That it happens to be nonmonetary profit doesn't seem particularly relevant.
While it is sometimes impossible--or very difficult--to determine the wages paid by business in your area, if one knows that a pizza joint, say, pays povert-level wages, one might consider buying elsewhere. This would be the sort of response that Milton Friedman might applaud.
While Friedman might prefer consumer choice over coercion as a means of raising wages, I doubt very much that raising wages above market levels is a goal he would support.
While it is true businesses will have to reasonably expect a profit before they venture their capital, I don't see why I should believe that raising the minimum wage should necessarily create unemployment. Why should I believe that a company that made $9 billion last year would not have still made a profit if the minimum wage had been, say, $12/hour?
Wal-Mart, as a company, would probably continue to profit, but that's not really the point. In economics, all the interesting stuff happens at the margin, and Wal-Mart's not at the margin. It's the employers who aren't doing as well that will have to lay off workers, or close down altogether. A few Wal-Mart stores would probably have to shut down, too. Wal-Mart, as a corporation, may be highly profitable, but not all of its stores are. One of the most fundamental laws of economics is that when price goes up, less is demanded, and labor is no different from any other good in that regard.
This point, as you say, really goes to the heart of important issues of economic justice (if there really is such a subject matter--many think there's not; I think there is).
Whenever someone adds a modifier to the word "justice," the effect is to indicate that it differs from actual justice in some significant way.
But we deal with tax evaders (not enough in my opinion, though), and we place cameras to catch people who run toll-booths. We do these things in order to enforce policies we think are right. And we would do the same for the consequences of a minimum wage.
These things aren't free, though. We, as taxpayers, are going to have to pay for this enforcement, and we're all going to be worse off as a result. The reality of price control is that it's always a negative sum game. Some people may be better off, and some may be worse off, but the total of the losses exceeds the total of the gains. If you really want to help the poor, that's fine, but wage floors are the wrong way to go about it. Speaking of Capitalism and Freedom, that was the book in which Friedman proposed the negative income tax, was it not? If we accept the idea that the government should give subsidies to the poor (see below), that seems like a much less harmful way than wage controls.
I think that I morally should give some of my money to charities that help the poorest in the world.
This raises an interesting point. No matter how you try to dress it up, paying above-market wages is charity. If I can get someone to work for me for $5 per hour, but I pay him $10, the other $5 is a gift. And that begs the question: With all the people in the third world who are literally starving to death through no fault of their own, why should we waste our resources on those who were born in the wealthiest nation on Earth and has failed to make the most of it? Since we don't have the resources to alleviate all the poverty in the world, why not start with those who are even worse off and who share no responsibility for their sad plight?
-- January 29, 2005 04:08 PM ∞
Kevin Brancato wrote:Paul,
Sorry for not responding earlier, but taking care of my 1.5 year old son pretty much drained me this weekend.
1) I don't have concern for a class of people. I have concern for people in certain situations. The class of "working poor" in the U.S. are some of the best off people in the entire world.
2a) My local pizzeria actually lets its drivers keep its tips; like waiting tables at many restaurants, that's a major portion of the pay. (As an economist, I ask businessmen insanely private questions, which they answer most of the time!) Most of its drivers are illegal immigrants; they were poor before they came to the U.S. Are they are poor now? Well, sure, but they're much better off.
2b) I really don't see the point of buying my pizza from another place. How does it help them if a boycott actually works, and shuts their pizza place down? (Boycott all you wish, I shop where I like).
2c) Should any store be allowed to employ people at $7 an hour? Yes. Frankly, I wish the only people in those jobs were those who needed extra cash, or were all screwups, or high school and college students, or recent immigrants.My father owned a small business, and paid part-time salespeople what would amount to $10 an hour now, with no benefits. He could not pay more without paying himself less. I oppose charitable donations by companies, especially corporations.
3) Raise the minimum wage to $90 an hour, an unemployment will follow. Raise it to $9 an hour, and I can tell you that there will be tremendous pressure to shift people off the books, to increase productivity, to raise prices and fire people. That the minumum wage causes unemployment in the short run and long run is NOT just a theory (although contrary evidence exists that fast-food restaurants aren't as responsive as predicted). The minimum wage is a focal point, which wages cling to. In short, somebody who would have started at $5.75, will start at $5.15. This happens, because the wages are so close...
More later...
-- January 31, 2005 11:49 AM ∞
