4 ms·

Your numbers are way off base. If Walmart retail labor costs went up 25%, their costs wouldn't go up 25%, a tiny percentage of the cost of goods at Walmart is i

by nsp 10y ago

Your numbers are way off base. If Walmart retail labor costs went up 25%, their costs wouldn't go up 25%, a tiny percentage of the cost of goods at Walmart is in the cost of labor, it's part of why they've been so successful. Most people making <$15 an hour work in the service industry. If everyone is forced to bear higher costs simultaneously, it's a lot easier to raise prices and pass that cost along to the consumer.

rebootthesystem 10y ago
> If Walmart retail labor costs went up 25%, their costs wouldn't go up 25%, a tiny percentage of the cost of goods at Walmart is in the cost of labor Oh, please! If you are going to write something like that at least pull-up a recent Walmart annual report and study it. Do some research and educate yourself before forming opinions so far out of alignment with reality. Walmart employs over TWO MILLION people in the US alone. Labor cost is, in fact, one of Walmart's largest liabilities. There is NOT WAY they could survive a 25% labor cost hike without rising retail prices AND laying off a bunch of people because nobody is going to pay tons more for their products. Please, do yourself a favor and learn to read a financial statement and play with it in a spreadsheet in order to understand how the real world works.
- JoeAltmaier 10y ago
  Really? Because the other retailers don't use cheap labor now? Because not everyone's labor rates will go up? If wages went up by fiat, then everybody is in the same boat. I call it 'playing dot-to-dot'. You can string together a sketch that jumps from point to point and make any case you like. Let me try. Minimum wage goes up - so folks have more money to spend, so they buy more from retailers, so profit margins rise, so the economy booms and hiring increases. Everybody wins! That story is 'true' too. They all are. Just, its part of a bigger story. Which is called 'economics' and isn't just some madeup cherry-picked local case folks like to trot out and say "what about this!" and think they've got it all figured out. So anyway, its immoral to freeze just the wage labor is paid, for the sole purpose of making the rest of us live better. Its simply wrong.
  - rebootthesystem 10y ago
    Please go read through the Walmart annual financial statement. > Minimum wage goes up - so folks have more money to spend, so they buy more from retailers, so profit margins rise, so the economy booms and hiring increases. Everybody wins! Fantasy. You are missing a very important part there that should be obvious to anyone today: Competition is global, not national. Let's take your theory up to an extreme. Let's raise minimum wage to, say, $50 an hour. Why not? Per your thinking it's simple. Everyone raises prices and all is good. And so, you manufacture product A in the US and now have to sell it for $155 each. I manufacture the same product. I fire everyone except for a small sales staff and take the product to China to manufacture it there. I am able to sell the same product with equal or better quality for $25. When people have to choose between your product for $155 or mine, of equal or better quality, for $25, they will choose mine every single time over yours. Your sales plummet, you have to fire everyone and close down the company. Or you fire everyone and go to China just like I was forced to do. At one point even importing bricks from China becomes a better financial decisions. In other words, the scenario you painted is a fantasy. The vast majority of products sold in the US today are NOT made in the US. We can raise our wages and prices all we want. It will only serve to create vast unemployment and further destroy us from within. Just wait and see what will happen when $15 per hour laws ripple through the entire nation during the next few years. There are companies already leaving California because of just this. Same recommendation as I seem to make all too often on HN: You don't understand how business works. Please do some reading and fire-up a spreadsheet and play with numbers. It isn't very complicated at a basic level. > So anyway, its immoral to freeze just the wage labor is paid Exactly. That's minimum wage. The free market should determine what that is. Our local and national economies will determine where the wage floor might be. In San Francisco this could be $15 per hour minimum wage due to cost of living. In other parts of the country it could be $7, $10 or $12. Government intrusion accomplishes only one thing: Job loss.
    - cr0sh 10y ago
      > When people have to choose between your product for $155 or mine, of equal or better quality, for $25, they will choose mine every single time over yours. Not necessarily: https://en.wikipedia.org/wiki/Common_law_of_business_balance https://en.wikipedia.org/wiki/Common_law_of_business_balance ...and related with: https://en.wikipedia.org/wiki/Veblen_good https://en.wikipedia.org/wiki/Veblen_good You probably already know this, though - and I am not saying that because of these two things that your premise (or anyone else's) is wrong -or- correct. I just wanted to inject this, as to many it may be counter-intuitive that by dropping your price (or selling at a lower price), that sometimes people won't purchase it. I think there have been studies done where they've used the exact same product, but priced it differently, and despite the product being identical in every way, people purchased the higher-priced item more frequently.

by nsp 10y ago

rebootthesystem 10y ago

> If Walmart retail labor costs went up 25%, their costs wouldn't go up 25%, a tiny percentage of the cost of goods at Walmart is in the cost of labor Oh, please! If you are going to write something like that at least pull-up a recent Walmart annual report and study it. Do some research and educate yourself before forming opinions so far out of alignment with reality. Walmart employs over TWO MILLION people in the US alone. Labor cost is, in fact, one of Walmart's largest liabilities. There is NOT WAY they could survive a 25% labor cost hike without rising retail prices AND laying off a bunch of people because nobody is going to pay tons more for their products. Please, do yourself a favor and learn to read a financial statement and play with it in a spreadsheet in order to understand how the real world works.

JoeAltmaier 10y ago
Really? Because the other retailers don't use cheap labor now? Because not everyone's labor rates will go up? If wages went up by fiat, then everybody is in the same boat. I call it 'playing dot-to-dot'. You can string together a sketch that jumps from point to point and make any case you like. Let me try. Minimum wage goes up - so folks have more money to spend, so they buy more from retailers, so profit margins rise, so the economy booms and hiring increases. Everybody wins! That story is 'true' too. They all are. Just, its part of a bigger story. Which is called 'economics' and isn't just some madeup cherry-picked local case folks like to trot out and say "what about this!" and think they've got it all figured out. So anyway, its immoral to freeze just the wage labor is paid, for the sole purpose of making the rest of us live better. Its simply wrong.
- rebootthesystem 10y ago
  Please go read through the Walmart annual financial statement. > Minimum wage goes up - so folks have more money to spend, so they buy more from retailers, so profit margins rise, so the economy booms and hiring increases. Everybody wins! Fantasy. You are missing a very important part there that should be obvious to anyone today: Competition is global, not national. Let's take your theory up to an extreme. Let's raise minimum wage to, say, $50 an hour. Why not? Per your thinking it's simple. Everyone raises prices and all is good. And so, you manufacture product A in the US and now have to sell it for $155 each. I manufacture the same product. I fire everyone except for a small sales staff and take the product to China to manufacture it there. I am able to sell the same product with equal or better quality for $25. When people have to choose between your product for $155 or mine, of equal or better quality, for $25, they will choose mine every single time over yours. Your sales plummet, you have to fire everyone and close down the company. Or you fire everyone and go to China just like I was forced to do. At one point even importing bricks from China becomes a better financial decisions. In other words, the scenario you painted is a fantasy. The vast majority of products sold in the US today are NOT made in the US. We can raise our wages and prices all we want. It will only serve to create vast unemployment and further destroy us from within. Just wait and see what will happen when $15 per hour laws ripple through the entire nation during the next few years. There are companies already leaving California because of just this. Same recommendation as I seem to make all too often on HN: You don't understand how business works. Please do some reading and fire-up a spreadsheet and play with numbers. It isn't very complicated at a basic level. > So anyway, its immoral to freeze just the wage labor is paid Exactly. That's minimum wage. The free market should determine what that is. Our local and national economies will determine where the wage floor might be. In San Francisco this could be $15 per hour minimum wage due to cost of living. In other parts of the country it could be $7, $10 or $12. Government intrusion accomplishes only one thing: Job loss.
  - cr0sh 10y ago
    > When people have to choose between your product for $155 or mine, of equal or better quality, for $25, they will choose mine every single time over yours. Not necessarily: https://en.wikipedia.org/wiki/Common_law_of_business_balance https://en.wikipedia.org/wiki/Common_law_of_business_balance ...and related with: https://en.wikipedia.org/wiki/Veblen_good https://en.wikipedia.org/wiki/Veblen_good You probably already know this, though - and I am not saying that because of these two things that your premise (or anyone else's) is wrong -or- correct. I just wanted to inject this, as to many it may be counter-intuitive that by dropping your price (or selling at a lower price), that sometimes people won't purchase it. I think there have been studies done where they've used the exact same product, but priced it differently, and despite the product being identical in every way, people purchased the higher-priced item more frequently.