Wal-Mart wage hike to $15 an hour would cost it $4.95 billion: study

[Eugene]

Source: Reuters

Business | Fri Jun 10, 2016 7:05pm EDT

Wal-Mart wage hike to $15 an hour would cost it $4.95 billion: study

Wal-Mart Stores Inc (WMT.N) would have to spend an additional $4.95 billion if it were to raise the minimum wage for its hourly employees in the United States to $15 per hour from the current $10 per hour, according to an estimate by the UC Berkeley Center for Labor Research.

As the country's largest private employer, Wal-Mart employs nearly 1.5 million people in the United States. Of that, 1.1 million are hourly employees, according to the study. The study estimated that 979,000 employees would get an increase if Wal-Mart went to $15 per hour.

The world's largest retailer raised wages for its hourly workers to $10 per hour earlier this year, but labor groups have called the raise inadequate. They have been demanding a $15 minimum wage, and the "Fight for Fifteen" movement has been a topic of discussion during the U.S. presidential campaign.

The research was released last week and has so far not been reported widely by the media. It was conducted at the request of OUR Wal-Mart, a union-backed group.

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Read more: http://www.reuters.com/article/us-walmart-wages-idUSKCN0YW2EA

[Silver_Witch]

1. I don't shop at Wal-Mart - Haven't for 25 years.

[katsy]

2. Maybe more accurate:

Wal-Mart wage hike to $15 an hour would SAVE TAXPAYERS $4.95 billion in corporate welfare

[HooptieWagon]

3. Ding ding ding!!

We have a winner.

[peace13]

5. Exactly!

[Trajan]

9. Plus ...

Those wages will be in the hands of regular workers who will SPEND EVERY DIME! ...

That spending will boost local business revenues and increase profits .... They just don't fucking get it ...

[ladjf]

26. And there would be some tax benefits to Walmart for the extra cost of doing business.

How would that extra cost actually effect the Walton's personal annual income?

[TeddyR]

4. Why $15

And not $50? What makes $15 the magic number?

[rurallib]

27. living wage, but not by much

But I am guessing by the tone of your post that there should be no minimum?

[msongs]

6. and then walmart sales would go way UP and many fewer boycotters too. long term bonus for WM nt

[DJ13]

7. The elites never admit that wage increases cost them nothing

They never increase wages by decreasing margins.

[deathrind]

8. Hmmmm...

"Revenue: Consolidated revenue reached $485.7 billion, an increase of $9.4 billion, or 2.0 percent. Currency exchange rate fluctuations negatively impacted revenue by approximately $5.3 billion. Constant currency revenue was almost $491 billion. E-commerce sales globally rose approximately 22 percent for the year, to $12.2 billion."

[Elmergantry]

10. What was the net profit? NT

Revenue <> Profit

[Loudestlib]

11. Net profit is whatever you want it to be.

[Travis_0004]

13. No it isnt. you have gaap principles to follow, and an audit to pass

You cant just make things up, you have rules to follow.

Walmart gets audited every year.

[Elmergantry]

17. Thanks

Nice to hear from the world of reality.


Isnt it around 15Billion or so? Over revenue of 400 billion or so? That's around 3%. 5 billion increase in wages cuts that margin to 2%? Very roughly speaking of course. At 2% that not an impressive margin. Stock price would suffer. Investors would flee.

[Deny and Shred]

28. $14.6 Billion in '15, $16.6 B in '14 & $16.0 B in '13.

Many billions in profit in previous years. Obviously $4.5 Billion is too much to pay to workers.

Fear not, Hillary will expend extensive political capital to rein in these corporate abuses.

[Squinch]

12. IIRC, the Walton family gets about 16 billion in profits each year. While the taxpayers

pay billions in welfare payments to Walmart workers. So increasing the minimum wage will reduce the taxpayers' welfare payments to Walmart workers, and I suspect that the Waltons can tighten their belts and squeak by on 11 billion a year.

[pansypoo53219]

14. cutting what, 3% of the profits for the waltons?

that $4 billions would get ADDED to the economy.

[Elmergantry]

18. More like 30% NT

[PaulaFarrell]

15. I wonder if this study takes into account savings made

Especially from less employee churn, but also if workers can survive on main wage without taking on part-time or overtime work, they will be less tired, more productive.

[mountain grammy]

16. Give a raise to the working poor and it goes directly back into the economy.

Give a billionaire a raise and it goes offshore.

[DonCoquixote]

19. the real horror

is not the idea that every business owner should expect to pay billions to raise the wage, it is that this family that can fit inside a limousine can afford to do just that and still have a few billion to live off of.

[Elmergantry]

20. If WalMarts CEO worked for $1

and gave his 25 million in comp to workers in increased wages, each of the 979,000 employees would earn about $25.00 more...per year.

[guillaumeb]

22. WHICH TOTALLY misses the point about CORPORATE PROFITS.

To make things simple.

[Elmergantry]

23. Well what is the point?

Wasn't it that WalMart is rolling in so much money that they can easily take on a 30% increase in wage costs?

Well the numbers show that it is not the case.

[guillaumeb]

24. You are conflating, or confusing, CEO pay and corporate profit.

Walmart recently bought back a massive amount of common stock. Read more here:

http://corporate.walmart.com/_news_/news-archive/investors/walmart-board-approves-new-15-billion-share-repurchase-program-1570554

The article, from WalMart itself, details a 13 billion buy back of stock. This buy back benefits the principal shareholders, who just happen to be the Walton heirs. It has been estimated that the 6 principal heirs are worth more than the bottom 40% of Americans COMBINED!!!!!!

If you feel that a company that pays its employees so little that many qualify for public aid, while also massively rewarding its executives and Walton family, is employing a good, sustainable business model, I would suggest that you need to do much more reading.

[Elmergantry]

25. So Walmart spent

13 billion of it own money to buy back its stock. Its WalMarts stock not the heirs. This stock is owned by the company, not the heirs.
The heirs shares may increase in value; so be it. After all it is the shareholders company.

But anyway are you saying it should have put that 13 billion into to increasing wages? For what, 3-4 years? till that extra money runs out? Then what?

>>If you feel that a company that pays its employees so little that many qualify for public aid, while also massively rewarding its executives and Walton family, is employing a good, sustainable business model, I would suggest that you need to do much more reading.

I am saying there is no correlation to executive pay to employee wages, as my simple math demonstrated. Take the millions to the CEO and give it to the nearly 1 million workers and they get next to squat. The Waltons get their money thru dividends (profits) and stock value appreciation. You want them to stop giving dividends and give it to employees? Again, giving away 30% of their profits to increased wages will tank the stock value - see how long WalMart will be "sustainable" after that. See the CEO out on his can per the BOD/Shareholders..

As for a sustainable business model, It seems WalMart has been doing ok, and will continue to do so it appears, so I guess for them it is quite sustainable.

[guillaumeb]

29. Your "simple math" misses the point.

By design or for another reason.

Your last comment is classic right wing corporate propaganda. Perhaps you also do not realize that your tax dollars subsidize the Walton 1% heirs. They are getting richer at your expense.

[Elmergantry]

31. again whats your point?

I take it it is this:

"If you feel that a company that pays its employees so little that many qualify for public aid, while also massively rewarding its executives and Walton family, is employing a good, sustainable business model"


Again, it seems to be working for WalMart, and has done so for may years. So yes it is sustainable as far as WalMart POV is concerned.

[guillaumeb]

21. WalMart spent twice that on a stock buy back.

The buy back principally benefited the Walton family which owns the majority of the shares of common stock.

[bluestateguy]

30. I think Wal-Mart could be convinced to stand down on that

it's the incessant whining of the small business and restaurant lobby that is likely to be a bigger political obstacle.