October 28, 2005

Have Wal-Mart's Real Wages Dropped by 10% Since 2001?

I'm tempted to write Barbaro and Greenhouse to ask where they obtained their wage figure... :

Some health experts praised the plan for making coverage more affordable, but others criticized it, noting that full-time Wal-Mart employees, who earn on average around $17,500 a year, could face out-of-pocket expenses of $2,500 a year or more.
One would presume that in such an important article, they're not using data from 2001, rounding down, and reporting it as if it were in today's dollars.

If so, the current figure is $300 lower than the figure reported for 2001 by those suing Wal-Mart. Granted, the Wal-Mart Class statistician was using only full-time hourly associates who had worked at least a year, so there could be definitional changes. But let's assume that the $17,500 represents recent data for full-time hourly employees who have worked at least one year.

Then we find, astonishingly to me, that Barbaro and Greenhouse are implicitly assuming that Wal-Mart has lowered real (BLS inflation adjusted) wages roughly 10% since 2001 (in 2001 dollars). I think that this would be an important point to make in the face of plans to lower benefits costs that have skyrocketed in double digits annually...

(Here is the calculation: 10% = 17800-(17500*175/190)/17800 , where 175 is the CPI-U for 01/2001, and 190 is the CPI-U for 01/2005) Note that I'm ignoring price changes in Wal-Mart itself, which some have argued are not well captured by the BLS.

Posted by Kevin at 7:49 AM

October 25, 2005

Wal-Mart Supports Increase in Fed. Min. Wage

Do you know why Lee Scott supports an increase in the federal minimum wage? I don't, but I can guess that its for the same reason that unions want Wal-Mart to have to pay for healthcare and a living wage: to hammer and hamper competition:

Scott said Wal-Mart would support an increase in the federal minimum wage from the current $5.15 an hour. On average, the company says, it pays full-time U.S. associates $9.68, so a higher minimum wage would have a much tougher effect on Wal-Mart's smaller rivals.

"While it is unusual for us to take a public position on a public policy issue of this kind," he said, "we simply believe it is time for Congress to take a responsible look at the minimum wage and other legislation that may help working families."

I'm tempted to call this a disgusting abuse of "working families" rhetoric, but I'm even more tempted to remind people that Wal-Mart's smaller rivals really do not pay better than Wal-Mart.

Note also the attempt to buy support of Democratic representatives....

Posted by Kevin at 9:53 AM

August 25, 2005

Wage Differential at WMW

Time and time again, I read about the different pay given to men at women by Wal-Mart. But what of its opponents? I had this to say on the Wal-Mart Watch blog post:

How much do the female employees of Wal-Mart Watch earn compared to their male colleagues?

It would be very interesting to see if the staff of WMW, Wake-Up-Wal-Mart, and the attorneys suing Wal-Mart shouldn't be the first to throw stones.

You may not like it, but differences in pay are pervasive in the American economy. In 2001, WM paid $9.55 an hour to full-time men, and $9.27 an hour to women. Women earned 97% of what men earned. That's a horrendous wage gap? No. We can infer from national data in this paper ($) that Wal-Mart outperforms the economy overall. The differential overall was about 75% in 1999, although the age breakout gives a more relevant comparison :


Even if Wal-Mart employed just 18-24 year olds, it would still have a better record than the average (and of course its small gap and large number of employees pulls up the average figure somewhat). Of course, this is just one look among many, and I welcome other slicing and dicing of the data; but it is pretty damn dishonest to slam Wal-Mart for it's wage gap without pointing out that it's pay structure is far more equal than a significantly large chunk of the rest of the economy.

Posted by Kevin at 10:08 AM

August 15, 2005

Sad but Almost True

Responding to teachers' unions pleas for the back-to-school crowd to boycott Wal-Mart, a commenter on Joanne Jacobs' blog laments Wal-Mart's low wages, while trying to figure out why a teachers' union should care about Wal-Mart:

Maybe the teacher's union figures Wal-Mart is about the best a public school graduate will be to do when they graduate. Also, many school teachers work part-time at Wal-Mart. If Wal-Mart paid better and had better benefits the teachers could quite working in the schools and just work at Wal-Mart full time.

Posted by Kevin at 2:33 PM

July 14, 2005

Roberts and DeLong on Wal-Mart Pay

In Why Wal-Mart Pays Less, Russ Roberts notes that it is supply and demand for particular sets of worker experience, patience, kindness, creativity, skills, knowledge, and abilities that determines wages, not benevolence.

I'd like to add two points:

1) Wal-Mart pay is NOT less for workers within the particular pool and geographic locations it pulls from. In many markets around the country, Wal-Mart pay is NOT less than Target, Best Buy, Kohls, or nonunionized grocers -- all the other places at which Wal-Mart workers might alternatively work. Anecdotal information sprinkled throughout this blog and on other sites, from workers who have chosen Wal-Mart over these and many others, demonstrates this.

2) Wal-Mart pulls from a different pool of workers than Costco does. What's so hard about admitting this openly? The focus on Costco, like Dr. DeLong's recent retail "model" post linking to this Financial Times article, even when admitting them, does not zero in on the differences in worker pools, and the problem this presents to other companies who might try to dip into the same pool:

�It�s important to pay people a fair living wage,� says Mr Galanti, �and if you do, and it�s better than everybody else, you�re going to get better people � and they�re going to stick around longer, and we see that.�
Mr. Galanti is NOT willing to pay just anybody a "fair living wage"; he'll pay that to people who produce that much, but will not pay it to slackers.

And what is true and workable for an individual firm is absolutely false for an entire economy. Repeat after me: if everyone followed this model, nobody could make a profit. Surely, it is theoretically possible for every retail company to follow this model, but then not every worker will produce as much as he is paid. Who is to cover these losses?

Henry Ford could offer a $5 day AND make a profit when everybody else thought he was crazy. But he and his management team sorted through, weeded out, and rejected thousands of workers of inferior quality, picking out the cream of the crop. If everybody else in the same labor market tried to match that, they would be fighting over the same best workers, not the ones who were rejected. Ford thought and Costco thinks that only a certain type of person deserves high wages. Wal-Mart acts on the same economic principle, but employs many people Costco would reject... and I take from this that there is no moral superiority to the Costco "high-wage model"....

Posted by Kevin at 10:04 AM

June 3, 2005

Effects of Living Wage Laws

Many Wal-Mart opponents want Wal-Mart to start paying a "living wage". However, empirical evidence contrasting areas with "living wage" laws with those that rejected them shows that when wages go up, opportunities for the least skilled go down:

Living wage campaigns have succeeded in about 100 jurisdictions in the United States but have also been unsuccessful in numerous cities. These unsuccessful campaigns provide a better control group or counterfactual for estimating the effects of living wage laws than the broader set of all cities without a law, and also permit the separate estimation of the effects of living wage laws and living wage campaigns. We find that living wage laws raise wages of low-wage workers but reduce employment among the least-skilled, especially when the laws cover business assistance recipients or are accompanied by similar laws in nearby cities.
LW campaigns have little effect; LW laws to have effects. Here are two snippets from the paper, taken from the results of putting data into a complicated model:

1) The passage of a living wage, on average, increases wages of the bottom decile of the wage distribution by 1.68 percent 21 when compared with all other cities, 1.52 percent when compared to set of cities with failed and derailed living wage campaigns, and 1.34 percent when compared only to the set of cities with derailed
campaigns. (pp. 20-1).

2) [W]hen compared with all cities, a living wage law lowers the employment rate of the less-skilled by 2.34 percentage points, which implies an elasticity of about −0.09.23 The employment results using the alternative control group of cities with failed and derailed (or
just derailed) living wage campaigns are similar. (p. 21).

Here's an earlier, free version of the paper.

Here are two other papers by David Neumark on the living wage.

Posted by Kevin at 3:34 PM

May 14, 2005

Thomas Sowell on WM

Nothing new or fancy from Tom Sowell, but his opinion on Wal-Mart is worth noting:

The New York Times says a book "by a group of scholars" is to be published this fall. It argues that Wal-Mart has an "obligation" to "treat its employees better."

This can hardly be called news. Nothing is easier than to find a group of academics � "scholars" if you agree with them � to advocate virtually anything on any subject. Nor is this notion of an "obligation" new.

Decades of lofty talk has centered on the "social responsibility" of businesses or a "social contract" between the generations when it comes to Social Security. Do you remember signing any such contract? I don't.

This pious talk means that when third parties want somebody else to pay for something, they simply call it a "social responsibility," an "obligation" or a "social contract."

So long as we keep buying this stuff, they will keep selling it...

To make such demands look like more than just the arbitrary notions of busybodies � which they are � some of these busybodies refer to the official poverty level, as if it were something objective, rather than what it is, simply an arbitrary line based on the government bureaucrats' notions.

The New York Times says Wal-Mart's average employee earns an income that is above the poverty line for a family of three but below the poverty line for a family of four. What are we to conclude from this?

The fashionable notion of "a living wage" is a wage that will support a family of four. And, sure enough, The New York Times finds a Wal-Mart employee who complains that he is not making "a living wage."

How is he living, if he is not making a living wage?

Should people be paid according to what they "need" or what their work is worth? Should they decide how big a family they want and then put the cost of supporting it on somebody else?

[H/T: Ross Nordeen]

Posted by Kevin at 7:28 AM

May 13, 2005

Pay Data Alone Cannot Determine Discrimination

The unions think they can shame Wal-Mart into giving its wage data to Democratic members of Congress. In response to the sex discrimination lawsuit, Wal-Mart has already given all its wages for 2001 to its opponents.

Personally, I'd like to have Wal-Mart's data, because it would make an interesting study, but I'm not in the businesses of intentionally distorting numbers to hurt the company. And I don't think releasing such partial information can do anything but continue to obscure the actual impact discrimination has had on the women of Wal-Mart.

I think that a much better (though much harder to obtain) dataset would include not just gender, hours, positions at WM, performance reviews, and wages, but the educational and work histories -- including performance on skills tests and hours and pay at non-WM jobs -- of a random sample of employees. Then, and only then, could one determine the impact of discrimination (as opposed to the impacts of education, prior experience, and continuous employment) on wages and promotions.

Many studies have found in other circumstances that when you adjust wages for these and other factors, the alleged sex discrimination in pay narrows considerably or disappears. The only data that could really determine the impact of discrimination would not just demonstrate unequal pay for equal work, but unequal pay for equal work, given equal education, skills, willingness to change jobs, ambition, and prior experience. Without the latter, the pay data demonstrate very little...

CNN/Money has the skinny.... Wal-Mart responds at length -- with charts!

Posted by Kevin at 7:42 AM

May 4, 2005

Can't WM Pay More?

Russell Roberts picks apart Stephen Greenhouse's "fake" NYTimes story about Wal-Mart paying too little:

There's no real news story here. It's not like someone discovered that Wal-Mart is using slave labor or not paying the minimum wage. That would be a news story. What we have instead is what I'd call a fake news story, generated by a press release from activists that plays to the sensibilities of a newspapers editors, reporters and readers.

Posted by Kevin at 2:07 PM

April 4, 2005

Chinese Labor: "Shortages" and Rising Wages

The Eclectic Econoclast notes that there is an apparent labor shortage in China, and that the manufacturing wage rates -- both freely set and regulated -- are rising in China to attract workers. According to the NYTimes:

And if wages keep rising... some companies could face a fate familiar to many manufacturers in the United States - they would have to move to a country with cheaper workers.
I blame Wal-Mart!

Posted by Kevin at 10:36 AM

March 7, 2005

Will higher wages at WM lower poverty rates?

David Neumark gives us a starting point to an answer:

It's conceivable that the minimum wage could be a boon to the poor even though it destroys some jobs. Those low-wage workers who keep their jobs are better off, after all, and they are bound to outnumber the losers. The net effect could be beneficial to those at or below the poverty line. Neumark and Wascher, however, have found that for every poor family that gets out of poverty thanks to a change in the minimum wage, there is a non-poor family that falls into poverty.

Neumark, now with the Public Policy Institute of California, says that many low-wage workers aren't poor, or even close to it. About a third of them, including a lot of middle-class teenagers, live in households with above-average incomes. Raising the pay floor makes it easier for them to buy gasoline and movie tickets, but it does nothing to combat poverty.

What's more, he's found, the people most likely to lose their jobs because of the minimum wage are not middle-class teens but poor adults.

H/T: The other Craig Newmark

Posted by Kevin at 5:11 PM

February 18, 2005

12 Weeks "Notice"

Canadian labor law requires 12 weeks notice before firing laying-off retail employees. However, this actually means you can fire employees now as long as you pay them for 12 weeks worth of work:

Wal-Mart has given official notice it intends to lay off workers at its Jonquiere store on May 6...

With more than 100 jobs at stake, the company is required to give at least 12 weeks' notice under Quebec's labour code.

But... the company could lay off the workers sooner if it is willing to pay their wages for 12 weeks after announcing its intentions.

Why would WM do that?

Posted by Kevin at 1:50 PM

January 28, 2005

Are WM Associates Paid Too Much?

Anonymous Occupant suggests that the level of customer service at Wal-Mart is too low for the wages received:

Where has customer service gone these days?? They just opened a new Wal-Mart about a mile from our house and my husband and I went there late last night to "check it out"....

ALL the male employees were wearing pants that were about four sizes too big for them. They were grabbing at the crotch of their pants and holding onto "whatever" it is that they think they have... Maybe CRABS!!! I can't understand why a corporation as large as Wal-Mart would allow their employees to dress and act so inapropriate. These are the people they hired to represent them to the public!!!

Oh, And forget trying to ask someone working there where anything is... They just shrug you off and say they don't know...

I tell ya, customer service has gone out the window!! When I was working, we had a dress code and were trained on how to treat the customers.. And that was for minimum wage!!! These people are making $12.00 to start!!! You would think they would be better trained on how to act like they had some common sense and decency. Not to mention self respect.

Unless AO is in a major city, $12 an hour sounds a bit high.

Posted by Kevin at 5:27 PM

January 14, 2005

WM: Marxists vs. Misesians

William Anderson of the Mises Institute argues against David Batstone and David Chandler writing in Sojourners. The topic: Henry Ford's $5 a day minimum wage--in 1913--which I have previously calculatd, comes out to about $10 an hour in 2003 dollars. The latter write:

Nearly a century ago, Henry Ford planned for his employees to be his best customers. Challenging the conventional wisdom that the best way to maximize profits was to tailor your product to the wealthiest segment of society, Ford decided to market his black Model T as "America's Everyman car."

For Ford, mass production went hand-in-hand with mass consumption. He established a simple benchmark for worker compensation: His workers should be able to buy the product they were making. Ford promised a $5-a-day minimum wage for all his workers�twice the prevailing automobile industry average.

Anderson responds:
In economic parlance, Ford decided to pay an "efficiency wage," that is, a wage that substantially raises the employee's opportunity cost of quitting or losing a job. Payment of such a wage makes sense only when it results in substantial cost-cutting elsewhere, and in Ford's situation, that was exactly the case. The company's costs associated with turnover and training had become overwhelming, so by increasing pay and cutting working hours, Ford was able to realize substantial savings that were greater than the added amount of daily wages he was paying.

To put it another way, Ford was not engaging in an act of humanitarian charity, and, as Folsom has pointed out, that view came from Ford himself. The idea that his decision to raise wages somehow "helped lay the foundation for a rising middle class in America," as Batstone and Chandler claim is ludicrous, but entirely understandable when one fails to realize that living standards within a society rise only when productivity increases.

UPDATE: Our vulgar-idiot-of-the-day award goes to a commenter on this version of the Marxist article. I won't reprint the comment here, click on the link if you're interested.

Posted by Kevin at 11:55 AM

December 31, 2004

Don Boudreaux on Wages

Now Don attacks Ms. Featherstone's lack of economic logic:

One of Featherstone�s claims that I didn�t deal with there is her allegation that Wal-Mart free-rides on government welfare payments. Her argument (which, I recall, is not unique to her) is that welfare payments enable Wal-Mart to pay lower wages. The allegation, in other words, is that taxpayer-funded welfare increases the supply of workers....

Don continues at length... read it all. IMHO he's thinking WAY too hard about Ms. Featherstone's essay. Why? She's not using a logical argument.

IMHO, Ms. Featherstone believes that Wal-Mart's low prices put competitors out of business. Essentially, WM eliminates the high wage competition... and then uses welfare subsidies to hire the desperate employees at lower wages. It's competitors don't do this because, unlike WM, they're moral. As Don notes, evidence is lacking for this theory.

But assume WM does put the competition out of business. How does Wal-Mart manage to hire people when it initially moves into an area, since it must compete with higher-paying better-benfit businesses? Unless one is willing to admit that WM pay is equal to competitors, or that the quality--dependability, experience, language competence, demeanor, etc.--of WM employees is inferior, this is a rather big problem for the WM-eat-dog theory. Asking people to go on the dole mightily disadvantages WM in the labor market--giving competitors a distinct worker quality advantage--,but this seems to be of no consequence to Ms. Featherstone.

I've been reading this anti-WM rhetoric for months. To me, Ms. Featherstone's piece was so... stale.

Posted by Kevin at 10:53 AM

October 29, 2004

WM Hinders Poverty Reduction

New research indicates that WM's creative destruction made poverty reduction slightly harder in the 1990s:

Counties that gained a Wal-Mart store experienced smaller reductions in family poverty rates during the economically strong 1990s than did counties not gaining a Wal-Mart store, according to a new study by a rural economist in Penn State's College of Agricultural Sciences.

The study examined the effect of the retailing chain on county poverty rates. Stephan Goetz, professor of agricultural and regional economics and faculty affiliate in Penn State's Center for Economic and Community Development, explains that, even during the economic upswing of the 1990s, counties that added a Wal-Mart store during the decade saw their poverty rate decline by a smaller amount than did counties not adding a store.

"The average family poverty rate declined nationwide by more than 18 percent between 1990 and 2000," he says. "The statistical model developed for this study suggests that the net predicted effect of a new store was relatively small, amounting to a 0.2 percentage point higher poverty rate for one new store, 0.4 percentage points for two new stores, and so forth compared to the counties where no new store was added.

"Furthermore, the 0.2 percent increase in the family poverty rate associated with one new store represents 8.3 percent of the 18.3 percent national reduction in the poverty rate during the 1990s. In other words, the ability of those counties that gained a Wal-Mart to decrease the poverty rate during the decade was reduced by about 8 percent relative to those counties that did not gain a new store."

Goetz says the effect, while small, is statistically significant and remains after other factors affecting changes in poverty over time are accounted for, including initial poverty and whether the county already had a Wal-Mart at the beginning of the decade. A possible explanation for this finding -- that Wal-Mart deliberately seeks out impoverished communities to locate new stores, and that these communities may in turn have more difficulty reducing poverty over time -- doesn't hold up, according to the researcher.

Press release here. Full report here. (I'm still reading it). The analyses seem straightforward, but I'm not convinced of any of the explanations offered... They admittedly don't adjust for the relatively lower price level in WM dominated areas.

Posted by Kevin at 10:04 AM

September 11, 2004

WM's Impact on Wages Abroad

In a recent study looking at wages paid to Wal-Mart workers in the San Francisco area, researchers out of Cal-Berkeley say that pay scales are about 30% below what unionized workers at competing large retailers get. The study's authors suggest that without Wal-Mart, these workers would be making far more money and be less prone to use public assistance, though nowhere in their extensive study do they offer any evidence of this key assertion. Every employer is subject to the sloppy claim that their workers might have found better jobs elsewhere (and then used less public assistance). But how many? Where is the analysis?

With the concern about these $11/hour workers, it seems we've all but forgotten the hard working people who make the stuff people buy at Wal-Mart. Some of them are only making 50 cents an hour. As I travel in China and find factories in more and more remote areas every time I go back, it is always astounding to see how rapidly an area can change from one with no phones and few bikes and no refrigeration to one in which people have healthful diets, better schooling, and great opportunities for children to grow in mind and body and spirit.

There are huge problems, and still about eighty-million Chinese who live on $75 a year or less... but the progress is unbelievable. It is the purchasing agents for Wal-mart and Target and Home Depot who are pushing incessantly for lower and lower costs that are central to the process. If they weren't pushing so hard for lower prices they wouldn't need to bother with getting new factories on line, back in the boonies where unpredictable problems will arise. We wouldn't see millions of Chinese migrate from the poor areas to the richer areas and then later returning to manage the new plant back home.

If you've never experienced the physical sensation of enduring hunger, or had to decide if you can feed both your children tonight, think carefully before you attack Wal-mart... they may well be the real revolutionaries of our time.

Of course, few are suggesting that we ban big-box stores entirely. Suppose an anti-Wal-Mart campaign were able to slow their growth to a trickle. For the really poor who live in remote areas of China, India, or the Dominican Republic.... their children's hope to live in the opportunity society that now predominates in much of China may be greatly delayed but not necessarily ruined.

The notion that those who care must oppose the companies who cut costs, like Dell or Wal-Mart is only possible if you ignore the vision of a billion people who still live on a dollar a day. We found that singing "We are the World" with Michael Jackson and Bruce Springsteen didn't end the suffering in Africa. Meanwhile we see much of Asia has banished hunger and privation. The hope of those still suffering in dire poverty lies not with the followers of Mother Theresa but with the cost-cutting purchasing agents of Kiichiro Toyoda, Sam Walton, and Michael Dell.

Posted by Dave at 3:38 PM

July 11, 2004

In These Times: The ITT List

While surfing online for something on a totally different topic, having nothing whatsoever to do with Wal-Mart, I came across this item that in my opinion is certainly worth noting.

Am quoting it in full however, as it is not clear to me exactly how long it may remain on the In These Times The ITT List Web page: News and commentary written by In These Times editors and staff.

It was orginally posted there by Emily Udell, advertising director at In These Times:

The ITT List

The Women of Wal-Mart
July 7, 2004

Today Wal-Mart asked the San Francisco Federal Court of Appeals to review Judge Martin W. Jenkin�s ruling that a sex discrimination case against the monolithic corporation be considered a class action lawsuit. The class could include as many as 1.6 million employees�almost every woman who has worked for Wal-Mart since December 1996.

Wal-Mart�s reputed discrimination against women is an issue that even 1992�s Miss America Carolyn Sapp is behind.

The former beauty queen launched a Web site Wal-Mart versus Women to spread the word about the corporation�s gender discrimination. The site features news and ways to get involved in the issue. Who would�ve thought?

In a June 2nd article The Labor Research Association connects the discrimination to the fact that Wal-Mart�s labor force is not unionized. Cynthia Green writes, �Wal-Mart has denied all claims of gender discrimination, but the alleged infractions are of a piece with the company�s history of union bashing.�

And indeed union bashing is a priority for Wal-Mart, according to a recent article by Liza Featherstone in The Nation. Featherstone quotes a Wal-Mart manger�s handbook: �The entire management staff should fully comprehend and appreciate exactly what is expected of their individual efforts to meet the union free objective.... Unless each member of management is willing to spend the necessary time, effort, energy, and money, it will not be accomplished. The time involved is...365 days per year....� This is only one of many jaw-dropping tidbits from Featherstone�s piece.

The SF Court of Appeals has not commented on Wal-Mart�s request for a review yet, but hopefully this case will go forward as a class-action suit that can begin to chip away at the bad labor practices that have been institutionalized by the world�s largest employer.

Posted by Emily Udell


There is more on the same page, however nothing else on the page I came across at the time was related to Wal-Mart or the class action court case in question.

Posted by Morgan at 8:46 PM

June 4, 2004

More Details on the New Wage Policy

walmart_hits_back.gif Read this CNN/Money article.

Among some of the other changes, Scott said the company would establish an office of diversity and an automated lunch break messaging system that would alert employees to take their breaks on time.

"If 50 percent of the people applying for the job of store manager are women, we will work to make sure that 50 percent of the people receiving those jobs are women," Scott said. "My bonus next year could decline by as much as 15 percent if I don't live up to my diversity goals."

50% regardless of the applicants qualifications?!?

Full details still forthcoming.

Posted by Kevin at 3:54 PM

New WM Pay Policy

How off the wire is news of a change in the WM pay policy:

NEW YORK (Reuters) - Wal-Mart Stores Inc. is preparing to introduce significant changes to its pay system that could mean raises for new workers but penalties for higher-paid veterans, according to published reports.

At its annual shareholders meeting Friday, the world's biggest retailer is expected to unveil a new compensation policy for hourly workers that is expected to tie pay more closely to job responsibilities, the Wall Street Journal reported.

Wendy Zellner, writing in BusinessWeek has incredibly more detail.

Posted by Kevin at 8:48 AM

Costco vs. Sam's Club Wages

Just wanted to point out Bob Arne's excellent post comparing CostCo and Sam's Club wages (and resulting profits) on my other blog Truck and Barter.

Posted by Kevin at 8:37 AM

May 31, 2004

Against Scripture to Shop at WM

On Mises Blog, William L. Anderson responds to WM-critics who contend shopping at WM is a sin:

Wal-Mart is not engaged in a grand conspiracy to push down wages in any given market, and twisted logic cannot prove otherwise....

In places like Southern California, where there are numerous employment opportunities, to say that workers are "forced" to work at Wal-Mart for "slave wages" is ridiculous. As noted before, the fact that workers there would be willing to accept higher pay is not evidence that they are enslaved. That they would prefer more to less simply means that they are normal, purposeful human beings.

(Link is to the full article, which I cannot access from the blog).

Posted by Kevin at 1:41 PM

May 28, 2004

Kenneth Stone has the Facts

Yes, he said, Wal-Mart pays lower wages than unionized grocery stores, but in general its wages and benefits are in line with those of most retailers.

"Retailing's just a low-paid profession," he said. "That's all there is to it."

Yes, he said, Wal-Mart puts a lot of pressure on local businesses, but it also saves consumers money on a host of everyday staples.

Yes, he said, his research shows that Wal-Mart draws business away from existing stores, especially in such market segments as grocery, apparel and hardware. But other segments, such as restaurants, taverns and consumer services, tend to benefit from the customer traffic Wal-Mart attracts.

Stone said a typical Wal-Mart supercenter will bring in $70 million a year in sales. Overall, his research shows, counties tend to see a gain in net sales for the first few years after a supercenter arrives, followed by a drop-off after Wal-Mart builds more stores in the region.

"It's pretty much a zero-sum game when you come right down to it," he said. "If a store does 70 million in an area that's not growing very rapidly, it doesn't come out of thin air. It comes a little bit out of this merchant's cash register, a little bit out of that merchant's cash register."

When an economist can draw a crowd of 100 regular folks wherever he goes, you can tell he's hit on a hot topic. Here's Ken Stone's webpage, with links to a wide array of his publications.

Posted by Kevin at 11:00 AM

May 8, 2004

WM Pay Much Higher than Expected

WM's new distribution center in St. Lucie, FL will pay $11.75 as a starting wage, with 50 cent raises after 90 days and 6 months. Some people are shocked:

Wal-Mart had previously said only that its wages would be "competitive," without releasing any specifics because it was conducting the wage survey.

The pay scale announced Friday brought a smile to the face of JoAnna McHugh, the One Stop Career Center system manager for the Port St. Lucie-based Workforce Development Board of the Treasure Coast, which is handling the Wal-Mart appli- cation process.

Because the company was required to pay an average wage of only $11.78 an hour [to receive $1000 grants], she said, some expected wages two or three dollars per hour lower than that.

"We're thrilled � $11.75 is only the entry level, which means it can only go up," McHugh said. "We thought that with a $11.78 average wage, there might be some $9 or $10 jobs in there ..."

Local economist Merle Dimbath added, "They are going in with the brute force of cold, hard cash."

The pay scale should have a positive impact on the wage market in St. Lucie County, which is much needed because the current level is below the state average, he said....

Craig Ridgway, general manager of the distribution center, said not only are the wages "very good" for the area, the benefits are also excellent. The benefit package includes a 401K plan, profit sharing, life insurance, vacation and holidays and health/dental insurance...

Without doing any advertising about the pay scale, Wal-Mart has received more than 4,300 applications...

Posted by Kevin at 11:57 AM