OT Walmart and you

Should have been that way all along. You sound like a manager of some sort. Managers are simply looking for TODAY'S bottom line. If they see a way to reduce costs by dumping jobs to overseas competition, they'll do it. They could make better attempts to be more COMPETITIVE but they're too busy trying to be more PROFITABLE & many see TODAY'S highest dollar as more important than being in business tomorrow. Managers are looking for IMMEDIATE answers. I feel that reducing over-priced wages should allow more jobs to theoretically stay where they are but only temporarily. I don't see that simply increasing the population's education level will allow the population to *earn* a living wage. Where are all these educated people going to work? So I'm educated, so what - the jobs are going overseas to unregulated & government subsidized companies. A complete lifestyle change will have to occur as well. I don't see that happening easily or overnight. I also see this as increasingly more difficult to sell to the population while they watch completely outlandish salaries & bonuses continue to increase for CEO's, upper level management, etc. Not to mention the pay raises & perks (huge pensions & no S.S. crap) our U.S. government continually receives & votes for themselves. Ahhhh, but this is where the higher level education will take us, right? How many CEO's, business unit managers, does this world need? Millions & millions? Watch what's happening to Delphi in Michigan. Those employees realize a pay cut is coming. How many of us could take a 60% pay cut and continue to live the way they've been accustomed to live? A complete lifestyle change would come with that kind of pay cut. Of course you'd be resistant that THAT radical of a change. Management allowed wages to get this high because of their own GREED. Blue collar employees DO NOT run the company.

I guess you can say goodby to your social security check. Once all those wages go away, and nobody is there to tax, to pay into your fund, the thing's gonna collapse.

Remember, each one of those $15 hr burger flippers is paying into

Jim

This is the pizza theory, as discussed by the head of, what, Continental Airlines?

The idea is, if you make pizzas, and you are a manager rewarded for cutting costs, eventually you will come up with the bright idea for leaving the cheese off the pizza.

Makes sense, right? Think of how much money you can save doing that, all the raw materials costs, all the labor, takes less time to cook, and so on.

So you do that, and you will get all kinds of brownie points for saving a few bucks for the company. Great stuff, right?

Jim

This is, indeed, true, although it is hard to outsource burger flipping. Once the society is not able to pay enough to various workers, it would not be able to paintain its payouts to retired people as well.

It is also not a given that personal savings (as opposed to pensions) are going to substantial benefits -- savings are just colored pieces of paper that are a vague claim on a little share of economic resources. If the amount of resources shrinks, so will the little shares of it. Think of commercial real estate, for example, its value is in what renters can afford to pay for rent.

The Walmart Distro center in Porterville California is about that size..and it only supports Californias rural central valley

Gunner

Well, maybe it's hard to outsource burger flipping, but at some McDs in Oregon, the person taking your order at the drive up microphone is in North Dakota. They might try to move that to Bangalor...

The distribution building south of Albuquerque is also MONSTROUS. Even from I25 it looks to be close to a quarter mile square. Thats a lot of room if all they do is swap stuff between trucks. :-) ...lew...

snip--

Absolutely! I've long maintained that people should be paid what they earn, their real worth. Unearned money costs the consumer, raising prices unreasonably. It's only a matter of time until it's top heavy and tips over.

Wrong! I've never been in the position of management, aside from having worked for myself, alone, for 26 years. For your information, I did this earning, in my very best year, only $52,000 gross. I charged a reasonable fee for my time------and didn't expect anything more. I earned the money--which is my point. I'm just trying to not sound hypocritical, as if it was fine for me to make unearned money, but not the other guy. Anyone that knows me knows I've always practiced what I preach in that regard.

My position comes from the reality of having had to deal with the economics of manufacturing, and coming to terms with the idea that you can't get much more than a job is worth if you want to stay in business. There's plenty of people willing to work for a reasonable fee that are competing for the same contracts. Never lose sight of the fact that there is no free lunch. Someone, somewhere, pays the tab.

Heh! Sears took that approach years ago. Damn near put them out of business.

I, for one, quit patronizing them for many years, until I had few options, having moved to a small community where there are few stores from which to pick. Seems they learned a lesson of sorts, however. They are doing better. They still sell some low quality junk, but at junk prices.

If they see a

Given a reasonable wage scale, and workers with reasonable expectations, it would be less advantageous for management to move operations-----possibly insuring longevity of jobs. As it stands, who can blame any corporation for wanting to move operations to a different country? Yeah, management is greedy, but workers aren't endearing themselves to management, either.

Did you happen to hear the report today on Public Radio about the impending layoffs at Ford? The average wage is $27/hr, and does not include benefits. Sorry to say, I don't recall the name of the woman being interviewed, but she explained that keeping the employees on the payroll was costing Ford over $100,000/year/employee, including benefits. While they'll continue to be paid a high percentage of their wages when the job is gone, until the contract under which they've been working expires, in the long haul, Ford will benefit. They'll have eliminated wage earners that have no particular skills, and are earning outrageous wages. Don't be surprised when you see the work they've been doing show up in another country.

I don't see that simply increasing the population's

I agree. Being educated isn't the answer, not in the sense of formal education. What I'm talking about is preparing one's self to make a living. It need not be with a college degree, although it would be nice to have one. How about learning a skill, then working for a reasonable fee? Instead, we have, in many instances, fools that have dropped out of high school, no qualifications of any kind, taking jobs that can be filled by most anyone off the street, then demanding (and often getting) wages far and away beyond value. They want a "living wage", but didn't do anything to prepare themselves to earn one. For this, we are now paying the price of reality. Business will stand still for such abuse only so long. Eventually, as I stated above, it tips over because it's top heavy. It's safe to say it's tipped over, folks. The Chinese and Indians have taken the jobs. They're willing to work for modest pay. We're not. It never ceases to amaze me that many American workers would rather have no job, than one with pay in keeping with one's qualifications.

A agree, in both cases. Sadly, the lifestyle change should have never been a part of the equation. If workers had been somewhat smarter about their jobs, taking more pride and turning out a top quality product, *for reasonable pay*, maybe we wouldn't be where we are today. None of us should have ever been paid unearned money. Maybe, just maybe, had we kept our demands reasonable, it wouldn't have taken the turn it has taken. Could be it would have happened anyway, but one thing is for sure. It is happening.

I agree, but I'm afraid I'd have to say that unions have played a huge role in where we are today as well. They've encouraged workers to demand more pay, often for less effort, and have driven wages to the point of no longer being competitive in a reasonable world market. Couple that with ever escalating medical costs and the incentive for industry to abandon the American worker is greater than many can resist. Like it or not, there will be equilibrium-----it's being driven by us, the people.

I'm not sympathetic towards management. I'm totally revolted by the income of many of these dudes. When we contribute to any charitable association, one of the things we research is the pay scale of the CEO. If they're making a ton of money, our contributions go elsewhere. I don't have a clue what we can do about the money they receive, but I don't like it any better than you do.

How do we address this problem?

Harold

One big difference, like it or not. I earned my social security check. I paid into the fund for years, and I paid both halves (remember, I was self employed), unlike most people. I do not make, nor am I willing to make, an apology for recovering money that was taken from me for years without my consent. DO NOT BLAME ME for SS. I, too, was a victim. .

And I'm for ever grateful for their contribution. Too bad they've priced me out of their offerings. Minimum wage in Washington is now over $7.60/hr, Don't recall the exact amount. This for kids flipping burgers? The results are that it now costs a family of four about $25 for burgers. I recall buying a cheese burger, order of fries and a medium coke for 72 cents. You could also buy a gallon of gasoline for 22 cents. Sigh.

Harold

Harold, it's really late here, but you know I have to weigh in on this issue.

Just like the "right" price is whatever people will pay, the "right" wage is whatever employers will pay. The US was in a beautiful position for many decades, with little real competition for sophisticated manufactured goods, and with a balance struck between wages and corporate incomes that was working so well our growth rates, and real incomes, soared like never before in history. At the same time, our *rate* of accumulating debt was actually quite low, now that we understand debt and monetary behavior a lot better than we did, say, in the '50s and '60s, and realize those debt figures that scared us then were trivial.

You could say we would have produced more cars and they would have been cheaper if wages had been lower. That's true enough. But the distribution of income would have been more widely dispersed (more sharply divided between rich and poor), which means that the market for cars would have been a lot smaller. This is what Henry Ford figured out back in the early part of the last century, when he doubled everyone's wages so they could buy more cars.

There is no "right" price or wage except that which allows economic growth and a high level of employment. In a free market, those "right" prices and wages work themselves out on the basis of where the forces that determine them balance out. We had a lot of pressure to increase wages, but it worked out, balancing at a high equilibrium point from the standpoint of labor. The economy soared. What happens when you increase wages is that markets increase tremendously -- that's why Americans bought so much crap, and still do. Higher wages may mean (usually do mean) lower *percentage* returns on investment. But with a captive market for investment (the US), what are investors going to do to make more money on their investments? Only those things that are available to do within the economy, at the established equilibrium of return on investment. This is it, folks, and the money has to find investment opportunities at any interest rate available. They can't stuff billions under the mattress.

Once you have a foreign outlet for capital and foreign producers that can make acceptable goods for the US market, we're in real international competition. Hello, globalization. Now the markets, prices, and wages revert to an older state of equilibrium because there are lots of low-wage outlets for capital, as there were in the early days of the Industrial Revolution. Now we see again where the greater "natural" power lies, all else being equal: with the investors. One way to look at the high-wage years in the US is that the natural power of the investors was constrained by the power of unions, which produced higher wages across the economy. We had succeeded in forcing the capitalist system to perform an unnatural act: high growth with high wages and high levels of employment. And it was sustainable, as long as we were in our own, hermetically sealed part of the world.

Now we're racing toward a new equilibrium. People like Alan Tonelson say we're in a race to the bottom. There is some truth in that, but don't get excited. The equilibrium we have now, or are racing towards, is more like the classic one that produced huge disparities in incomes between the haves and the have-nots. But I'm not saying Tonelson is right or that we're headed for a Marxian denouement. What is true, however, is that we have a situation in which GDP is growing and most of the benefit is accruing to the top income-earners. I do suspect that we'll be able to keep all but the very bottom income-earners from falling in absolute terms. (But we're doing it the hard way. That's a story for another day, however.)

Of course, this is a ridiculously simplified account of what's happened, but it's enough to illustrate the point: we've PROVEN that the equilibrium can be moved, without destroying capitalism itself. The working people of this country are in a *qualitatively* higher place than they were 60 years ago. Most of us now own houses, multiple cars, and nice clothes, and can send our kids to college one way or another (I'll report more on the reality of this in another year or two. ). Some might argue that it was *because* wages rose so high. It may be true. But the more important truth is that we didn't stall capitalist growth by squeezing the equilibrium upward for labor, putting additional pressure on capital, and at the same time we grew a middle class the likes of which the world has never seen.

Your personal sense of value tells you that unskilled workers have been making too much, but I don't believe it's true. Not in any economic sense. We've proven it, by the growth we've enjoyed.

The reason we're in trouble now is that our skewed equilibrium has left us in a very difficult place from which to compete with Chinese workers. for example, making 80 cents an hour. That's certainly true, too. But the cost of being "prepared" for such competition would have been years of much lower wages for workers, smaller markets for goods, and a smaller economy overall than the one we have now. That's a lousy tradeoff. And all of that sacrifice would have been no guarantee that we wouldn't face the displacements we're facing now. At best, it probably would have delayed it.

The most interesting thing to me is our demonstration of how flexible capitalism can be, to accommodate the severe wage pressures we put upon it for so long. We've proven that there is no fundamental reason that we can't have an economy that works well and still produces an enriched middle class, with a pretty fair set of supports for the lowest wage earners at the same time.

All it takes is a hermetically sealed corner of the world in which to do it. Those days are gone, but the experiment is fairly complete. From now on, we proceed knowing that there is no "natural" and irrevocable equilibrium imposed by our economic system. We've revoked it successfully. If we fall now, it won't be because we made too much for too long. It will be because you can't seal off a corner of the world forever.

-- Ed Huntress

No, you didn't. It's an entitlement program, paid for by taxes I pay.

You paid for your parent's generation.

I'm not saying this to be mean, but you should consider what would happen if the SS check went away - if the government defaulted on the promise it made to you, and said 'the check comes every two months now, or the check is half the size. Too bad.'

That's what most private companies are doing now with their pension plans. "sorry the cost is too big. You don't get what we promised."

Remember, every one of those laid off Ford and GM workers will decide shortly to not contribute to the H. Vordos entitlement fund. I know for sure they won't be contributing to mine.

:(

Jim

Whether retired people (not just you, but also those to follow soon) would be able to get as many goods and services for their social security checks, is not so much a question of morality as it is a question of reality. The issue is, is the society able to deliver as much as it promised.

I wonder where Wal-Mart buys all that "made in the USA" propaganda...Taiwan? China?

John E.

Agreed. Instead of stepping up to the plate, many unskilled workers take anything that comes along, then demands wages beyond the value of their time. That's the way such folks deal with their lack of preparation for making a living.

Others, the one's in question, would be the guy that's working for $30/hr, but has no particular skills. The job isn't worth the money, but he's managed to push it there. His job can be taken from him by anyone off the street, for a wage in keeping with the lack of skills the job requires, yet he'd rather not work than work for less money, the real value of the job at hand. He appears to be willing to lose everything instead of give up the three boats and RV vehicles that he maybe should have never been able to afford, anyway. That's what is happening today------jobs are leaving because they're no longer affordable here in the States. Even highly skilled positions are being lost (thanks to CNC and other modern innovations), as you likely know. Regardless of one's views, had we kept a pace in keeping with the world economy, it may have never happened. The financial advantages would have been much smaller, so it may not have been worth the effort. Dunno. One thing sure ----- it's happening now-----and people are finding they can no longer make the unearned money.

Harold

That, in no way, diminishes the fact that money was taken from me for years, all without my permission. I would have gladly opted out, but I was not allowed. I was forced to participate in a program that I chose not to support. The money was stolen from me, with a promise that it would be returned later, when I was old. They gambled that I would die first, but I beat the odds. I expect my money to be returned. I earned the right by being a victim of a program that was not of my choosing.

I understand that as well as it can be understood.

Government, just like private industry, will fail, and for the same reasons. It will just take longer for the government. They're bankrupt now, and have been for years. Luckily, they are the ones that control the printing presses, and had the foresight to remove precious metals from our monetary system, making it possible to issue valueless dollars to keep paying the fiddler, who keeps raising his fee. I'm not going to suggest that we're where we are because of unreasonable wages paid to workers, but it sure as hell has had to have had an impact.

My point in this is that no one can get ahead by demanding unearned money. If you back your boss into a corner with higher wage demands, he'll make an offset in his product price to cover the raise. It's not long until he isn't competitive in the market, or prices escalate across the board, to cover all the unreasonable wages, including management salaries. That's what's been happening here in the States for years, faster and faster each year. I can still remember when a Coupe DeVille Cadillac cost only $6,000 (1959).

It's unreasonable to expect anyone to pay more than a job is worth--------something that far too many of the workers here in the US (and maybe other countries as well----I don't know) have done for years. The ride is over. Corporations are in *pay back* mode, getting rid of workers with unreasonable wage and benefit demands, and poor work ethics. They finally found a way to accomplish the task. Those that have been caught up in the fact hate life-----but who's fault is it? Doesn't the worker share some of the blame?

Had the workers demanded something more reasonable, maybe it wouldn't have happened. Workers expecting to be taken care of for years after they're retired is no more unreasonable than you feel is SS. One difference is SS isn't a lot of money, unlike many of the retirement packages some folks have (had).

I hope you're wrong, Jim. You, like I, have been forced to contribute. Keep a good thought-----and realize that when you reach my age, your needs are generally smaller, and you'll appreciate the amount you receive.

You want to place blame? Go back to Roosevelt-----the master designer of this pyramid scheme. He's the guy you should have in your cross hairs, not people like me.

Harold

I agree, and in part, that's what I've been saying right along. We think there's no bottom to the well----take all you can in taxes (what else would you call Social Security contributions?) and promise the stars and the moon, all with a nice fence around them. I got no stars, I got no moon, and I got no fence. I have to pay for my own health care plan, and I get a check slightly under $1,200 from Social Security. What I have is austere, hardly something one could brag about. Society should have set reasonable goals, not asked for everything, particularly when it was unearned.

Harold

Society is totally unrestrained in what "it" asks for. We are supposed to be selecting lawmakers with some commonsense. When we relax our standards occasionally (OK, a lot) we get the inevitable result.