If Wal-Mart was unionized...

[John Dibble]

I couldn't find anything specific but company wide revenues are were about $260 billion a year or two ago:
http://www.msnbc.msn.com/id/4573885/
I have had some difficulty find anything on the number of employees but I believe it is around 700,000 workers at around 3,000 stores.

By my calculations increasing the minimum wage to $15/hour would raise WalMart's costs about 4.6%.

Ok, we said earlier that nationwide Wal-Mart pays roughly $8/hr to their employees. So the average increase would be $7/hr, or $11,648/yr. For 700k workers, that totals to $8,153,600,000 in annual costs. Now, what you need to understand is that revenue does not equal profit - revenue is money taken in exchange for goods and services before considering costs. That means that the cost of buying goods wholesale from producers, the costs of labor, and the various other costs of running their stores is not factored in the the $260 billion you mentioned.

Now, I actually found a really good source of Wal-Mart data that we hadn't considered before, wikipedia. Dumb us for overlooking an obvious source of data. http://en.wikipedia.org/wiki/Wal-Mart

So, now that we have some current figures, we can look at how much a minimum wage increase to $15 would actually cost.

In the last fiscal year, Wal-Mart's total revenue was $285.2 billion, and net income was $10.3 billion(3.6% profit margin). So, if the minimum wage increase causes expenditures to rise above $10.3 billion, Wal-Mart is operating at a loss.

Now, Wal-Mart worldwide has 1.4 million employees, but 330k or those are international. So, actually there are 1.07 million U.S. employees. Now, I'm sure a number of those are corporate office or some other position that makes over $15/hr or work on a salary rather than a wage, so let's cut that down by 100k to be safe for our calculations. So, 970k Wal-Mart store employees making an average of $8/hr and working 32 hours a week. The wage increase would result in a total expenditure increase of $11,298,560,000. Thus, Wal-Mart is operating at a loss and must increase prices to a large degree to return to a profit making position.

[opebo]

You're wrong about the revenues vs. profits.  Revenues are the total sales.

So, you say 11 billion in increased wages.. and revenues are 285 billion.  So:

11/285= 3.85% increase in prices!

Even less troublesome than the 4.6% increase I initially caculated. 

[John Dibble]

You're wrong about the revenues vs. profits.  Revenues are the total sales.

So, you say 11 billion in increased wages.. and revenues are 285 billion.  So:

11/285= 3.85% increase in prices!

Even less troublesome than the 4.6% increase I initially caculated. 

Uhm, that would only get them to the point of barely being able to run, which is a precarious point for any company to be in. If their company does not make a profit, the investors will not have much incentive to invest. Further, they need to make a profit large enough to keep and expand the number and amount of investments in their company. So, to bring their company back up the the same amount of profit as before, they would actually have to have an increase of 7.7%. Still, this increase does not include the effects of the minimum wage outside of Wal-Mart - prices would further have to be increased because the producers of the goods that Wal-Mart sells would have to increase the wholesale prices due to the fact that the wages of many of their own employees will have been raised.

Of course, Wal-Mart imports many goods from other countries like China, so that further price increase effect would only apply to goods produced in the U.S. This would give Wal-Mart further incintive to import goods rather than buy them domestically, and you should know that it will further increase our trade deficit and decrease the number of good production jobs in the United States.

[opebo]

You're wrong about the revenues vs. profits.  Revenues are the total sales.

So, you say 11 billion in increased wages.. and revenues are 285 billion.  So:

11/285= 3.85% increase in prices!

Even less troublesome than the 4.6% increase I initially caculated. 

Uhm, that would only get them to the point of barely being able to run, which is a precarious point for any company to be in. If their company does not make a profit, the investors will not have much incentive to invest. Further, they need to make a profit large enough to keep and expand the number and amount of investments in their company. So, to bring their company back up the the same amount of profit as before, they would actually have to have an increase of 7.7%. Still, this increase does not include the effects of the minimum wage outside of Wal-Mart - prices would further have to be increased because the producers of the goods that Wal-Mart sells would have to increase the wholesale prices due to the fact that the wages of many of their own employees will have been raised.

No you are quite wrong - the 3.85% increase in prices absorbs the $11 billion in increased wages and leaves profits precisely where they were at $10.3 billion.

[John Dibble]

You're wrong about the revenues vs. profits.  Revenues are the total sales.

So, you say 11 billion in increased wages.. and revenues are 285 billion.  So:

11/285= 3.85% increase in prices!

Even less troublesome than the 4.6% increase I initially caculated. 

Uhm, that would only get them to the point of barely being able to run, which is a precarious point for any company to be in. If their company does not make a profit, the investors will not have much incentive to invest. Further, they need to make a profit large enough to keep and expand the number and amount of investments in their company. So, to bring their company back up the the same amount of profit as before, they would actually have to have an increase of 7.7%. Still, this increase does not include the effects of the minimum wage outside of Wal-Mart - prices would further have to be increased because the producers of the goods that Wal-Mart sells would have to increase the wholesale prices due to the fact that the wages of many of their own employees will have been raised.

No you are quite wrong - the 3.85% increase in prices absorbs the $11 billion in increased wages and leaves profits precisely where they were at $10.3 billion.

285 billion * 1.0385(103.85%)  = 295.9 billion.

295.9 billion - 11 billion = 284.95.

[opebo]

You're wrong about the revenues vs. profits.  Revenues are the total sales.

So, you say 11 billion in increased wages.. and revenues are 285 billion.  So:

11/285= 3.85% increase in prices!

Even less troublesome than the 4.6% increase I initially caculated. 

Uhm, that would only get them to the point of barely being able to run, which is a precarious point for any company to be in. If their company does not make a profit, the investors will not have much incentive to invest. Further, they need to make a profit large enough to keep and expand the number and amount of investments in their company. So, to bring their company back up the the same amount of profit as before, they would actually have to have an increase of 7.7%. Still, this increase does not include the effects of the minimum wage outside of Wal-Mart - prices would further have to be increased because the producers of the goods that Wal-Mart sells would have to increase the wholesale prices due to the fact that the wages of many of their own employees will have been raised.

No you are quite wrong - the 3.85% increase in prices absorbs the $11 billion in increased wages and leaves profits precisely where they were at $10.3 billion.

285 billion * 1.0385(103.85%)  = 295.9 billion.

295.9 billion - 11 billion = 284.95.

Yes, there is a slight rounding error.  I should've put something like 3.859649%

But seriously, the amount prices would have to go up, keeping profits the same, due to an 11 billion wage increase would be under 3.86%. 

[John Dibble]

You're wrong about the revenues vs. profits.  Revenues are the total sales.

So, you say 11 billion in increased wages.. and revenues are 285 billion.  So:

11/285= 3.85% increase in prices!

Even less troublesome than the 4.6% increase I initially caculated. 

Uhm, that would only get them to the point of barely being able to run, which is a precarious point for any company to be in. If their company does not make a profit, the investors will not have much incentive to invest. Further, they need to make a profit large enough to keep and expand the number and amount of investments in their company. So, to bring their company back up the the same amount of profit as before, they would actually have to have an increase of 7.7%. Still, this increase does not include the effects of the minimum wage outside of Wal-Mart - prices would further have to be increased because the producers of the goods that Wal-Mart sells would have to increase the wholesale prices due to the fact that the wages of many of their own employees will have been raised.

No you are quite wrong - the 3.85% increase in prices absorbs the $11 billion in increased wages and leaves profits precisely where they were at $10.3 billion.

285 billion * 1.0385(103.85%)  = 295.9 billion.

295.9 billion - 11 billion = 284.95.

Yes, there is a slight rounding error.  I should've put something like 3.859649%

But seriously, the amount prices would have to go up, keeping profits the same, due to an 11 billion wage increase would be under 3.86%. 

Rounding had nothing to do with it, math error on my part, my bad. I'm just tired as hell of arguing this. Besides, as I said, you'll still increase the trade deficit and prices of American goods by raising the minimum wage that high. In effect, you harm the economy a great deal.

[Filuwaúrdjan]

I am skeptical of the practice of identifying one's self worth with one's labour, particularly labour of such low status. 

You don't understand do you?

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No, I haven't. I don't see how a German film made in the '20's is at all relavent.
Next thing, you'll be saying that Joe is an accurate portrayal of working class people...

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I couldn't give a flying f*** how much it would or would not cost Walmart.

$15 an hour as the lowest legal wage devalues higher wages. High earners or leeches sitting back and waiting for their inheiritance wouldn't have to worry about it... the people that would feel the pinch would be skilled manual workers and their families.
Actually, the rich would have to worry about it, as it would almost certainly result in a massive outbreak of industrial action because the workers and their unions would have been pushed into a corner.

[David S]

I've always advocated a $15/hour minimum wage for places like Walmart - though a $25-35/hour wage would be necesary to for example rear a family.  I think of Walmart were forced to pay $15/hour and provide decent treatment and benefits for its workers, the increase in prices would be very minor.  In fairness I think a legally mandated minumum wage that would cover all employers is somewhat more competitively 'fair' than if for example Walmart were  unionized and say KMart were not.

You really want to collapse our economy, don't you?

He's sure trying. You gotta give him that. 

[True Federalist (진정한 연방 주의자)]

opebo, I presume that even you will agree that from the viewpoint of its stockholders,  Wal-Mart is a well-run company that maximizes its profits.  If they could do as you suppose, i.e., raise prices because of their increased costs and still get the same level of profit then they aren’t well-run.  That’s because they could raise those prices now without their costs being increased and get even more profit than they now get.
TANSTAAFL

[opebo]

$15 an hour as the lowest legal wage devalues higher wages. High earners or leeches sitting back and waiting for their inheiritance wouldn't have to worry about it... the people that would feel the pinch would be skilled manual workers and their families.
Actually, the rich would have to worry about it, as it would almost certainly result in a massive outbreak of industrial action because the workers and their unions would have been pushed into a corner.

So your objection to your fellow workers making more money is that it would reduce inequality among the working class.  Well, you're a fine sort of comrade!

[opebo]

opebo, I presume that even you will agree that from the viewpoint of its stockholders,  Wal-Mart is a well-run company that maximizes its profits.  If they could do as you suppose, i.e., raise prices because of their increased costs and still get the same level of profit then they aren’t well-run.  That’s because they could raise those prices now without their costs being increased and get even more profit than they now get.

You are competely wrong, as you neglect that a $15/hour miniumum wage would be applied equally to all WalMart's competitors as well.

[John Dibble]

$15 an hour as the lowest legal wage devalues higher wages. High earners or leeches sitting back and waiting for their inheiritance wouldn't have to worry about it... the people that would feel the pinch would be skilled manual workers and their families.
Actually, the rich would have to worry about it, as it would almost certainly result in a massive outbreak of industrial action because the workers and their unions would have been pushed into a corner.

So your objection to your fellow workers making more money is that it would reduce inequality among the working class.  Well, you're a fine sort of comrade!

The middle class is the backbone of the U.S. economy, opebo. If you hurt them, decrease their spending power, you hurt everyone in the economy.

opebo, I presume that even you will agree that from the viewpoint of its stockholders,  Wal-Mart is a well-run company that maximizes its profits.  If they could do as you suppose, i.e., raise prices because of their increased costs and still get the same level of profit then they aren’t well-run.  That’s because they could raise those prices now without their costs being increased and get even more profit than they now get.

You are competely wrong, as you neglect that a $15/hour miniumum wage would be applied equally to all WalMart's competitors as well.

Which as I mentioned would raise prices further and result in an increase of cheap goods from foreign countries, costing us jobs and increasing the trade deficit.

[Filuwaúrdjan]

So your objection to your fellow workers making more money is that it would reduce inequality among the working class.  Well, you're a fine sort of comrade!

It would not reduce inequality, idiot. It would just result in out of control inflation and a lot of industrial action.

[opebo]

The middle class is the backbone of the U.S. economy, opebo. If you hurt them, decrease their spending power, you hurt everyone in the economy.

Um, I think that observation dates from 1973.  That middle class is a distant memory in 2005.  You might be thinking of the top income quintile, which is often misrepresented by media as the 'middle' class.
 

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No one is going to make goods in the US at $7 an hour anyway, because wages elsewhere are $3 per day.  So the $15 minimum wage is irrelevant to that.  Lets at least make the unmovable jobs pay well.

[John Dibble]

The middle class is the backbone of the U.S. economy, opebo. If you hurt them, decrease their spending power, you hurt everyone in the economy.

Um, I think that observation dates from 1973.  That middle class is a distant memory in 2005.  You might be thinking of the top income quintile, which is often misrepresented by media as the 'middle' class.

I actually live here, opebo, I think I have a better grasp on the situation than you do.

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No one is going to make goods in the US at $7 an hour anyway, because wages elsewhere are $3 per day.  So the $15 minimum wage is irrelevant to that.  Lets at least make the unmovable jobs pay well.
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They do make goods in the U.S. still. I've been to factories, and your plan would shut them down.

[opebo]

I actually live here, opebo, I think I have a better grasp on the situation than you do.

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These factories pay less than $15/hour?  Who needs sweatshops anyway?

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