[quote=no_such_reality]
Yes, that’s my point. Are they that short sighted? That incompetent? Oblivious, like the person driving around ten minutes trying to save a couple cents a gallon on gas? Or are they that cynical and jaded and they’ve actually run the numbers?
I really don’t think they’ve run the numbers. Other than the most basic, if we increase wages $1/hr across 3000 employees, that’s $6 million a year.
Not stopping to think they’re spending $10+ million on new hire training a year. They’re spending how much on hiring bonuses? They’re spending how many millions on compliance? etc.
They lost a 1/3rd of their staff on the raid. New management’s response was a massive media campaign, newspaper campaign, billboard compaign, pound the pavement town visit campaign, refugee hiring campaign, hiring bonuses, rework the operations to support multiple languages to replace ~600 workers and then expand another 1000.
All that instead of saying “hey, let’s try $2/hr more, it’s only $6 million and maybe it’ll slow down our $12 million new hire training expenses due to attrition”.[/quote]
Yes, I think they are that short-sighted. Compare the business models of Costco and Walmart.
Costco (and Price Club before them) employees are well paid, well above the average for retail. They offer benefits that even some much higher end employers don’t offer, and their employees love working for them and stick around a long time. They’re loyal. As are their customers, because we know we will almost always be treated well when we walk into one of their stores.
Compare that to Walmart, where employees are paid at the bottom of the retail scale, are horribly unhappy as a whole, they have high turnover, they cut hours leaving their shelves unstocked. And who would be the biggest beneficiary of jacking up the minimum wage across the country? Walmart. And who vociferously objects to raising the minimum wage? That would be the biggest welfare recipient in the country, Walmart.
I read somewhere over the last couple days that 10 cents of every retail dollar spent in this country is spent at Walmart. That number seems really high to me, but if it’s true, it can only mean that an extra $2 or $3 an hour in low paid workers pockets will end up as Walmart revenue, because it’s not the people making $100K a year spending all their money at Walmart.
Have they run the numbers? I’m sure they have. But it doesn’t fit into their budgets. The recruiting costs are off-budget. The lost revenue from empty shelves is off-budget. Employee turnover is off-budget. But direct employee costs are on budget, and management can be held accountable when that goes up. So they ignore the effects to the bottom line, and maintain a staff that qualifies for public assistance, living at poverty levels. And tell them to take a 2nd job to make ends meet.
