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What Happens After A Mega Corporation Raises Its Workers' Wages

Tyler Durden's picture




 

Earlier today, McDonalds announced that it would become the latest company to raise hourly pay for 90,000 workers by more than 10% and add benefits such as paid vacation for its restaurant workers. Specifically, starting in July, MCD will pay at least $1 per hour more than the local legal minimum wage for employees at the roughly 1,500 restaurants it owns in the U.S. The increase will lift the average hourly rate for its U.S. restaurant employees to $9.90 on July 1 and more than $10 by the end of 2016, from $9.01 currently. Finally, McDonald’s also will enable workers after a year of employment to accrue up to five days of paid time-off annually.

With this announcement, McDonalds joins the following companies which have likewise raised minimum wages in recent months:

  • WalMart
  • Aetna
  • Gap
  • Ikea
  • Target
  • TJ Maxx

Surely this is great news for the workers of these above companies, as some of the massive wealth accrued by corporate shareholders may be finally trickling down to the lowliest of employees, right? As it turns out, the answer is far from clear.

As the following WSJ story released overnight, here is what happens when mega-corporations such as WalMart and McDonalds, whose specialty are commoditized products and services and have razor thin margins, yet which try to give an appearance of doing the right thing, raise minimum wages. They start flexing their muscles, and in the process trample all over the companies that comprise their own cost overhead: their suppliers and vendors.

Take the case of WalMart: the world's biggest retailer "is increasing the pressure on suppliers to cut the cost of their products, in an effort to regain the mantle of low-price leader and turn around its sluggish U.S. sales."

What WalMart is doing is borderline illegal: it is explicitly telling its vendors "this is what you will do with your excess cash." Of course, we say borderline because WMT's action is perfectly legal in the confines of the pure law. However, in the context of an economy that is sputtering, WMT's vendors have no choice but to comply or risk losing what is certainly their largest revenue stream and risk bankruptcy.

The retailing behemoth says it has been telling suppliers to forgo investments in joint marketing with the retailer and plow the savings into lower prices instead. Makers of branded consumer products from diapers to yogurt typically earmark a portion of their budgets for marketing with Wal-Mart, spending on things like eye-catching product displays and online advertisements.

 

Wal-Mart has long had a reputation for pressing its suppliers to cut costs to help lower prices, but the retailer’s new leadership has embraced the concept with fresh vigor. Wal-Mart’s price advantage against its competitors has been eroded, and it has steadily been losing market share in the U.S. since the recession ended, while rivals including Kroger Co. and Costco Wholesale Corp. gained share, according to data from the consultancy Kantar Retail.

 

The new dictate on prices is creating tension with companies that supply the hundreds of thousands of products on Wal-Mart’s shelves.

The irony is that while WMT (or MCD or GAP or Target) boosts the living standards of its employees by the smallest of fractions, it cripples the cost and wage structure of the entire ecosystem of vendors that feed into it, and what takes place is a veritable avalanche effect where a few cent increase for the lowest paid megacorp employees results in a tidal wave of layoffs for said megacorp's vendors.

The zeal on pricing is part of a push by new Chief Executive Doug McMillon and U.S. head Greg Foran to turn around Wal-Mart’s core domestic business, which booked $288 billion in sales in the year ended Jan. 31, 60% of the company’s total. While U.S. sales were up 3% last year, the growth was a scant 0.5% excluding newly opened stores, and the division’s profit fell.

 

Messrs. Foran and McMillon laid out the pricing message during a private meeting with suppliers in February. They want suppliers to operate with the same everyday low cost model that Wal-Mart employs from top to bottom.

 

“They kept pushing, ‘We’re going back to basics, it’s all about low pricing,’ ” said one supplier who attended the meeting.

And a quick lesson in corporate double speak: where the new CEO says:

“We want to get back to a point where we are playing offense with price because of the way we go to market,” Mr. McMillon said, according to a transcript. “Our pricing strategy is aimed at one objective, and that is building trust.”

... what he means is that "our strategy is to remind our vendors that we call all the shots and since we can't cut prices any more, they will have to do it."

Messrs. Foran and McMillon laid out the pricing message during a private meeting with suppliers in February. They want suppliers to operate with the same everyday low cost model that Wal-Mart employs from top to bottom.

 

“They kept pushing, ‘We’re going back to basics, it’s all about low pricing,’ ” said one supplier who attended the meeting.

Which is another way of saying "deflation" in compensation, also synonymous for "lower wages for everyone else." Because now that each of WalMart's suppliers is forced by WMT management to cut their costs and to be "price competitive", they will either reduce wages of its own workers or, comparably, force their own suppliers to reduce pricing, and so on, until ultimatly the entire economy is gripped in wage deflation.

Which also means that Obama, who has decided to join the Fed in micro-managing the economy by diktat, will have no choice but to issue more executive orders, to undo the aftermath of this previous short-sighted commands. Perhaps he will start be realizing that it is not minimum wage that he should be focusing on but maximum hours as explained before:

Although when faced with what now appears certain sliding wages across a deflating US economy, not even Obama will be able to come up with mutually offsetting executive orders fast enough to fix what is now a runaway train on a collision course.

In fact, the only winner here, once again, will be the banks who will continue to fabricate, spin and perpetuate the lie that the only thing that can fix the next wave of declining wages is, as always, QE - QE whose only intention and purpose is to steal from the poor and middle class and give to the 0.01%.

 

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Wed, 04/01/2015 - 21:56 | 5951011 HonkyShogun
HonkyShogun's picture

Paying wages in jewbux is like paying in company store credit.

Wed, 04/01/2015 - 22:23 | 5951064 SolidSnake961
SolidSnake961's picture

not entirely buying it, walmart is barely losing much in terms of profit.....mcdonalds is also not losing much in terms of profit....walmart would have pressured the vendors anyways becuase it can, not becuase of a tiny loss of profit

Wed, 04/01/2015 - 22:36 | 5951090 MarkD
MarkD's picture

Consumer will suffer with smaller burgers, less fries, light bulbs that last only 4 months, toilet paper with NY Times articles still readable on it and grape juice that's tastes like grass clippings.

Thu, 04/02/2015 - 03:22 | 5951422 Fukushima Fricassee
Fukushima Fricassee's picture

Stupid fucking Obama voters won't notice.

Thu, 04/02/2015 - 05:17 | 5951476 RafterManFMJ
RafterManFMJ's picture

I worked for Wal*Mart a few days ago; checked my own self out, I did, while a gelatinous mass of blue aproned vigilence looked on.

Clever idea; 30 lines of checkout with only 2 manned. If you're not unemployed, and actually have some place to be you check yourself out.

Well played really - just another way those who work and are productive can be forced yet again to serve both the corporate masters and the feckless welfare class.

Thu, 04/02/2015 - 06:28 | 5951515 negative rates
negative rates's picture

"Take the case", I stopped there.

Thu, 04/02/2015 - 07:00 | 5951544 cnmcdee
cnmcdee's picture

If I was a vendor to Walmart and they called me telling me I had to lower my prices I would hang up cancel all business with these fucks and look for business else where.  If you cannot determine your own price you might as well fold up your company and go be someones wage bitch...

Years ago walmart called the service company I used to work for blah blah blah all this work for our company after a 20 minute sales pitch the lady on the end proceeds to tell the company we will be subbing to them at rate x which  was 40% less than usual.  The owner informed them thank you but nope and that was it.. They were cold calling companies with their 'rate'

Only slaves cannot negotiate their salary and wage and do what their told and get paid what their told ... 

Thu, 04/02/2015 - 07:08 | 5951551 overmedicatedun...
overmedicatedundersexed's picture

you just gave buffet and billy gates a woody:

"Only slaves cannot negotiate their salary and wage and do what their told and get paid what their told ... "

Thu, 04/02/2015 - 09:18 | 5951808 swmnguy
swmnguy's picture

About 2 years ago I helped put together a proposal to produce a large business meeting for Wal-Mart.  It was to be at a "name" Orlando convention hotel.  Wal-Mart provided a very detailed RFP, and told us there were two other companies bidding; one was the incumbent they were not happy with.  On close examination, the RFP didn't make any sense and the meeting could not be produced the way they specified.  We could see that all they cared about was price.  So, we put together the lowest-end, cheapest proposal we could, but which would actually deliver the project on time and on budget.  'Cause you know, hey; we might get the job and actually have to deliver it, right?

They came back to us and said our price was 40% higher than anyone else's and said if we would drop the price 40%, we could do the show.  We said, "No, thanks."

I know pricing in my industry.  There's no way that event could have been done for 40% less than our proposal.  No way.  10%, sure.  20%; I have serious doubts.  But if there was truly a proposal out there for 40% less, it didn't meet the criteria of the RFP, and the company doing it would have lost money, and the event would have failed.

My suspicion all along was that Wal-Mart was planning to stick with the incumbent the whole time but was "Brand-X"ing us, as in, "We compared Brand X to the leading product, and..."  Maybe they used the threat of competition to get a few percent out of the incumbent.

One of the requirements of the RFP was that all on-site internet usage had to go through their network.  They were going to get a line-out from the hotel, and set up their own network on that connection, and everyone would have to connect through that.  They explicitly said they were going to have full-time staff on site going through with "sniffers" to detect any other internet connectivity, and whomever they caught  would be escorted off the premises and not paid.  Of course that's absurd; the attendees alone would account for about 2000 iPhones.  Maybe they were also going to jam frequencies; the Gaylord (Marriott) hotels have been caught doing that so you have to pay tens of thousands of dollars for your attendees to have internet access.

At any rate, the whole thing was a slime-fest and I'm very glad I didn't have to do the event.  Any company that does business with Wal-Mart is doing it because they don't have any options.  And once they sign up, they really don't have any options anymore.

Thu, 04/02/2015 - 18:19 | 5953779 mkkby
mkkby's picture

It is well known that once you provide a product to walmart, your business is toast.  They give you a huge order that forces you to invest in capital equipment and hire lots of staff.  Later, they will threaten to take away the business -- and you are stuck with the debt from expansion.  Now they own you.

Never do business with companies unless you can afford to lose the business someday and be fine.  Better to go thru smaller channels or online.  Much higher margins too.

Thu, 04/02/2015 - 08:26 | 5951654 Ward cleaver
Ward cleaver's picture

I just finished a 3 day stint at BBB and was
amazed at the way that company runs. Treadmill
of employees and the only ones that stay are
hard working foreigners who could
be making more by faking an injury and
going on SSDI like 1/2 the country.

Thu, 04/02/2015 - 08:14 | 5951634 all-priced-in
all-priced-in's picture

Their EBT card allows them to shop at better stores.

 

 

Thu, 04/02/2015 - 08:20 | 5951645 Ward cleaver
Ward cleaver's picture

It always comes back to the consumer paying.
Look, having rates at 0 is a doomed model that
will create more wealth at top and squeeze middle class.
Until they fight back (one way or another), this charade
will continue.

Wed, 04/01/2015 - 22:58 | 5951143 sun tzu
sun tzu's picture

In retail, labor costs are the second biggest expense after cost of goods sold. Why do you think an increase in labor costs would not hurt their profits much? 

Thu, 04/02/2015 - 06:31 | 5951518 negative rates
negative rates's picture

Hold on here, costs of goods SOLD, are an expense now, sure you really didn't mean , bought?

Thu, 04/02/2015 - 08:54 | 5951728 PrettySkulls
PrettySkulls's picture

That would be "Cost of Goods Unsold"

Which is more commonly called "inventory"

Thu, 04/02/2015 - 08:54 | 5951729 PrettySkulls
PrettySkulls's picture

That would be "Cost of Goods Unsold"

Which is more commonly called "inventory"

Thu, 04/02/2015 - 03:29 | 5951429 ebworthen
ebworthen's picture

More than likely it is a shrewd calculation that if they raise the wage scale 10% they will lose that much less in theft by scraping that much less of the bottom of the barrel; good P.R. too.

I guarantee you those M.B.A.'s and C.E.O.'s give not one whit about their fellow human beings.

Thu, 04/02/2015 - 06:32 | 5951520 Refuse-Resist
Refuse-Resist's picture

I agree. Anybody who's spent any time with C-Level people knows this is true in most cases.

 

BTDT.  Got the shirt.

 

FUCK YEAH!

Thu, 04/02/2015 - 06:42 | 5951528 overmedicatedun...
overmedicatedundersexed's picture

mc d's got to the point where they do not know what their business is about..been in one lately? ave cost of burgers $7 or more, fancy electric displays, that just confuse the public, lost all focus, and by the empty place I saw customers are going elsewhere..taco bell? w 99 cent food??

Thu, 04/02/2015 - 09:21 | 5951818 swmnguy
swmnguy's picture

Taco Bell serves food?

Thu, 04/02/2015 - 07:26 | 5951568 duo
duo's picture

One out of three WMT workers is eiter in training or has given notice.  How can that be productive?  I read that Wal-Mart hires in a year more people than work for GM, that statistically their whole hourly workforce turns over in 3 years.

Thu, 04/02/2015 - 08:35 | 5951667 all-priced-in
all-priced-in's picture

You need to understand the turn over is not exactly how the statistics make it look.

 

100 jobs in a company -

 

70 of them have almost no turnover - the people holding these jobs  stay with the company for years and years -

20 of them turn over every 2 years - normal healthy turnover - 

10 turn over 5 times a year. With a large % of this group only lasting a day or two before they quit.

 

I managed a company with this sort of turn over - wage rate is not the problem - raising them does little or nothing to impact turn over. Since these are the bottom level of the bottom level jobs - if you did raise wages up to the point where you eliminated turn over - it would destroy your whole wage structure -

 

You give the lowest guy a $5 raise - it ripples through your whole pay scale - it costs much less to accept a high turn over in jobs that require almost no training - VS trying to over pay to the point people stay in them.

 

 

 

 

 

 

 

Thu, 04/02/2015 - 09:16 | 5951799 Raging Debate
Raging Debate's picture

Duo - That was my thought also. It costs time/money to constantly train new employees. Plus I have seen ads from temp agencies for Wal Mart positions which take a percentage of pay as middlemen. I imagine the pay increases will lower turnover and the pay increase will be a wash.

As for the lower pricing and less sales EBT is $160 a month instead of $200. The result of pushing the suppliers will be less choices on the shelves. It is deflation season which is part of the bust phase. It will restore some purchasing for consumers but bumpy adjustments await along the way with bankrupticies and layoffs.

Thu, 04/02/2015 - 10:04 | 5951959 freedogger
freedogger's picture

Real profit sharing would make a difference. Bumping the min wage a buck - not convinced its going to change anyone's lives or make a difference in their net.

Wed, 04/01/2015 - 21:57 | 5951014 taketheredpill
taketheredpill's picture

I have been reading stories about Walmart pressuring vendors to cut costs for 20 years.  Just sayin.

 

Wed, 04/01/2015 - 22:00 | 5951020 Shizzmoney
Shizzmoney's picture

Walmart bends vendors over backwards and asks them, "lube or no lube?". 

Vendors usually opt for lube, take it with a smile, and walk out the door, with a check in hand, a happy customer.

Wed, 04/01/2015 - 23:33 | 5951210 WOAR
WOAR's picture

Well, I guess it's not rape if you're a prostitute.

Thu, 04/02/2015 - 08:37 | 5951679 Ward cleaver
Ward cleaver's picture

True, then go back and fire a dozen employees and tell remaining slaves to come in earlier.

Thu, 04/02/2015 - 08:44 | 5951701 all-priced-in
all-priced-in's picture

I ran a manufacturing company for 15 years - Walmart was always in the top 5 customers in sales -

 

They were always the top customer in profit.

 

The bonus I earned from Walmart profit paid my mortgage off early.  

 

They were so easy to do business with - they always kept their word - they always paid the invoice when due - they actually helped us drive cost out of all our products.

 

Anyone that can't sell to Walmart and make money should not be in business anyway.

 

 

Wed, 04/01/2015 - 22:05 | 5951031 nmewn
nmewn's picture

Maybe Mickey D's should hook up with some assorted school boards and sell pink-slime Big Macs.

The low cost leaders! ;-)

Wed, 04/01/2015 - 22:06 | 5951035 maxw3st
maxw3st's picture

The root of the problem isn't minimum wage. It's the maximum wage at the other end of the hierarchy. Yes, the average and lowest paid employees need wage hikes, but it needs to come out of wages at the top, not another company's lowest paid workers. Having executives make 230 times their average hourly worker just isn't a sustainable model.

Wed, 04/01/2015 - 22:18 | 5951056 cynicalskeptic
cynicalskeptic's picture

The endless push to pay the lowest possible labor costs (not applicable to 'upper management') has sent jobs overseas, brought cheap labor here (legslly via H1B's and illegally for low skills jobs) and kept wages down for everyone else.

The problems is that the US economy now depends on CONSUMPTION.   It doesn't matter how cheap crap is when you're not being paid enough to keep a roof over your head and eat, much less buy anything else.

Ford CREATED new customers for his cars when he RAISED wages to reduce turnover ion the assembly line.  EVERYBODY ended up better off.   No longer.  

Those at the top got greedy and they killed off the golden goose that once was the US economy.

 

Wed, 04/01/2015 - 22:35 | 5951088 RSDallas
RSDallas's picture

cynic,

You know I am pretty close to agreeing with you.

Wed, 04/01/2015 - 23:39 | 5951222 petkovplamen
petkovplamen's picture

well you know, ZH MUST post a specific numbers of Libertarian BS articles daily by law.

Thu, 04/02/2015 - 03:26 | 5951425 Fukushima Fricassee
Fukushima Fricassee's picture

The Political class is the killer of the goose. They produce nothing and are all over compensated.

Thu, 04/02/2015 - 07:54 | 5951601 blindfaith
blindfaith's picture

 

 

Before everyone cries 'don't cry for me Argentina" over Walmart and this BS article, let me tell you what they are doing here.

With the cheap cash the Fed has made available and dumb asss investors, my town of 25,000 now has 5 CVS and 3 Walgreens.  The last CVS was done on a 5 acre parcel which the they had to raise 5 feet to meet flood requirements.  ONE cubic yard of fill here is $150 plus leveling...you do the math.  They have at least 12 million in that store.  Anyone here can walk one mile and find a 'drug store' or grocery store with a pharmacy.  Both stores sell nearly the same things...less fresh meat and veggies. 

NOW COMES WALMART into the mix.  A 14 acre site that will need to be raised 10 feet because of the location, again fill is $150 per yars plus leveling.  How much money will be in this store is beyond reason.  But my towm of 25,000 will now have 13 places to get a prescription filled.

You go into any of these stores and they empty of customers that would support their existance.  I repeat, this town is 25,000 people. 

Considering we are told ( and I see it) that we will all need rubber boots in 15 years, none of this makes any sense.

So, wages...why the hell is that even a story when these companies have this much money to waste ?

Thu, 04/02/2015 - 08:40 | 5951688 plane jain
plane jain's picture

$150 a cubic yard plus leveling?

That is some crazy expensive dirt. 1 cubic foot/40 pound bag is usually at most $2 at big box store, and that is bagged and shipped on pallets. At 27 cubic feet per cubic yard that would be $54.

You need to get in the dirt business.

Thu, 04/02/2015 - 09:25 | 5951828 swmnguy
swmnguy's picture

Sounds like Florida to me.  There isn't any dirt near the coasts; a foot or so down it's coral whatever-it's-called.  Dirt has to be trucked in.

Thu, 04/02/2015 - 13:19 | 5952685 blindfaith
blindfaith's picture

you got it...good ol' FL

there is dirt in North Fl, but that is another story.

buro pits...they dig the limestone up.  No new permits issued in 20 years or more.

Thu, 04/02/2015 - 08:40 | 5951691 _SILENCER
_SILENCER's picture

Looks like they want your town drugged to the gills and spinning its wheels in the retail gulag.

You guys should patronize whatever mom and pop stores remain - if any - and let Megatron rust.

Thu, 04/02/2015 - 09:27 | 5951836 swmnguy
swmnguy's picture

And we see all kinds of snarky stories about China's "Ghost Cities."  How is this different?  I know, I know; when business does it it's good and when government does it it's bad, but I'm a lowly peon who only cares about the money going into and out of my pocket; I don't care where it comes from or goes to.

Thu, 04/02/2015 - 11:50 | 5952319 _SILENCER
_SILENCER's picture

I think Chinese Ghost Cities are being built for disaster recovery. Post War, perhaps.

Thu, 04/02/2015 - 09:38 | 5951868 ejmoosa
ejmoosa's picture

And to lure all of these businesses in to generate the illusion of growth, you have things called development authorities that issue bonds to finance these new businesses and give the new businesses big property tax breaks for ten years, and then you have another agency that gives tax credits for hiring and training....

In 20 years, you'll have urban blight because all of this overbuilding will lead to empty shells of buildings...

 

We'll know it all could have been avoided if we had just allowed natural supply and demand work it's magic.

Wed, 04/01/2015 - 23:02 | 5951152 sun tzu
sun tzu's picture

Walmart has 2.2 million employees. The CEO makes $35 million. Let's say they cut the CEO pay to $0. 

$35 million / 2.2 million = $16 raise per employee for the year or $1.33 per month

 

Anymore ideas?

Wed, 04/01/2015 - 23:39 | 5951223 WOAR
WOAR's picture

The CEO makes $35 million. The OTHER CEOs make roughly the same (Wal-Mart is owned by, like, three people). The next step down still makes multiple millions. And the next step. And the next step. And even sideways, into things like boards and committees that do nothing but talk about what color the interiors of the bathroooms are going to be.

If you go down the chain, and keep the wage disparity closer to 10 times the average worker, or even 30 times the average worker, then over several years the situation will get better.

Wed, 04/01/2015 - 23:42 | 5951232 baldski
baldski's picture

Hey Sunny: What % of the profits do the top five at Walmart make? I'll bet they take in 10% or more. Spread that around the bottom and it will help.

Wed, 04/01/2015 - 23:47 | 5951244 Peak Finance
Peak Finance's picture

Walmart, like most huge companies, has 100's of vastly overpaid VP's, and a staff of bootlickers and asskissers for each VP, along with a bunch of useless departments like their "Diversity suck-up departent"

So yea I am sure they can find some money to pay front line people more. 

Not that I support controlling or forcing Walmart or aly other company to pay higher wages just saying your example is not that great. 

Thu, 04/02/2015 - 03:44 | 5951441 HowdyDoody
HowdyDoody's picture

They could stop wasting money on lawyers - paying $2,000,000 in legal fees to avoid a $75,000 fine (AKA cost of doing business).

Thu, 04/02/2015 - 08:52 | 5951717 Ward cleaver
Ward cleaver's picture

One of the stupidest posts I've read since becoming a member. CEO
compensation is tied up in stock price so lowering wages, buying back stock while u fire people, replacing USA employees with $8/day Pakastanis
Etc etc so when u say $35MM I think u r underestimating comp. Go into company website and check out the insider selling.

Thu, 04/02/2015 - 09:34 | 5951860 swmnguy
swmnguy's picture

Target Corp. just cut 1700 people at their Headquarters, and plans to leave another 1400 jobs unfilled.  They say that, and some other measures, will save them $2 Billion.  I wonder what those other measures are, because $2,000,000,000 saved / 3100 jobs =  $645,161 per job.   The people I dealt with who got cut were no way making that kind of dough; maybe a third of that at the very most.   There's no way the jobs they cut at HQ will save them that unless they were vastly more bloated than even I thought they were.  But $2 Billion it is, I guess.

So, what are they going to do with all this money?   Stock buybacks.

If they had that many people making that much money they could just get rid of and keep on going without missing a beat, they're so stupid maybe stock buybacks is the best thing they could do with that money.

But hey, it'll boost EPS, maxing out the C-Level bonuses.

Wed, 04/01/2015 - 23:36 | 5951217 giovanni_f
giovanni_f's picture

Only 230 times more? This is socialism...

Wed, 04/01/2015 - 22:07 | 5951039 Tasty Sandwich
Tasty Sandwich's picture

I've noticed "help wanted" signs at several fast food joints, restaurants, and grocery stores in my city.

Wed, 04/01/2015 - 23:38 | 5951221 giovanni_f
giovanni_f's picture

So the green shots have finally grown into huge trees reaching to the sky. Middle class econimics works. The shadows of the cirsis have passed for good.

Wed, 04/01/2015 - 23:40 | 5951228 WOAR
WOAR's picture

I don't think the shadows of the circus are gone.

Oh wait, I think I read that wrong...

Thu, 04/02/2015 - 01:11 | 5951334 DipshitMiddleCl...
DipshitMiddleClassWhiteKid's picture

I recently just drove across the country and am now living on the west coast.

 

I have seen these signs in various US cities i've crossed.

 

I've come to realize that thanks to Obamas socialist policys, in combination with the shit wages most small businesses provide to people..it just isn't really worth it to go to work unless you're making more than 50k a year.

 

A single mom is eligible for 70K in benefits from what I understand.

 

That's what most entry to mid level engineers make.

 

Why go to college and bust your ass in a STEM program when you can just shit out kids from Tyrone and Jamal and get free shit?

 

 

Thu, 04/02/2015 - 03:30 | 5951430 Fukushima Fricassee
Fukushima Fricassee's picture

Bingo ringo

Thu, 04/02/2015 - 09:33 | 5951852 plane jain
plane jain's picture

By my calculations a single individual with no dependents and no state income tax needs to make $37,000 a year/ $17.79 an hour to afford a "middle class" lifestyle.

Gross $37,000

- $7,500+ in payroll taxes (per ADP calculator)

= $29,425 net

- $12,000/$1,000 a month housing (yes some areas it is more, some less)

- $3,600/$300 a month utilities optimistically (electric/gas/water/phone/internet)

- $5,200/$100 a week food (variable, but modest most places, includes meals out)

- $4,800/$400 a month transportation (car payment/insurance/gas/maintenance/tolls)

- $1,200/$100 a month clothing (modest priced replacements)

- $2,400/$200 a month health insurance, very optimistically

= $225 left for "savings" or entertainment

Of course you could live with roommates, live on beans and rice, ride your bike to work, etc. 

60% of US workers earn less than that. Many of those workers are supporting families.

For 2015 the US poverty guideline for a single person is $11,770. Eligibility for most social entitlement programs cuts off at 150% of poverty, so $17,655 annual income. From the same Social Security report looks like roughly 35% of workers earn less than $17,655 and qualify for benefits.

With the new normal 30 hour work week a wage up to $11.31 an hour will qualify a worker for benefits. Once again, this is a single worker with no dependents. So as long as employers continue to pay less than this they are being indirectly subsidized by taxpayers. 

So, yes, definite disincentives to work. I question the $70K a year that gets thrown around here, not every poor person has a child and/or lives in a state with such generous benefits. But I can see how someone would look at a part time $9 an hour job vs. FSA and decide that being in the FSA is a better deal.


 

 

Thu, 04/02/2015 - 09:42 | 5951885 swmnguy
swmnguy's picture

Actually I think your calculations are optimistic.  But your point is all too valid.

We're getting to the point of having to acknowledge a huge underground economy of some sort.  I'm not familiar with it, but people just aren't getting by on the incomes the Official sources claim are "liveable."  No way.

Thu, 04/02/2015 - 09:40 | 5951880 swmnguy
swmnguy's picture

That single mom getting $70k in benefits is about as real as the Unemployment and Inflation statistics.  Every article I've ever seen making that claim relies on bogus valuations of services and rents etc.  A third to a half of that is a lot more like it.  Unless you would value a falling-down shitbox apartment in the 'hood at the $3,000 a month the Section 8 landlord claims to his lender, or accept the $250/week/kid the daycare company is billing the State, or include the full maximum benefit of the crappy healthcare coverage.

Anybody who envies people on Welfare, connected up to that system like the people in "The Matrix" movies has never had any personal contact with that system.

Wed, 04/01/2015 - 22:13 | 5951049 tankster
tankster's picture

Lots of money to be saved in upper management''s ranks. No need to sqeeze the serfs

Wed, 04/01/2015 - 22:14 | 5951050 reader2010
reader2010's picture

"And I'll tell you what they want. They want it all for themselves but almost nothing for everybody else."

- George Carlin

Wed, 04/01/2015 - 22:18 | 5951057 buzzsaw99
buzzsaw99's picture

10%, wow, generous. /sarc.

fucking maggots

Wed, 04/01/2015 - 22:27 | 5951071 OldPhart
OldPhart's picture

Beats my 1.8% raise by a mile.

Wed, 04/01/2015 - 23:03 | 5951155 sun tzu
sun tzu's picture

Your 1.8% raise is almost double of my 1% raise. They told us we should be happy because gas prices are dropping. 

Thu, 04/02/2015 - 00:56 | 5951320 BooMushroom
BooMushroom's picture

Single digit raises with double digit inflation, you'll be a slave in no time!

Wed, 04/01/2015 - 22:23 | 5951066 NOZZLE
NOZZLE's picture

Fuck WalFarts, they are being decimated by ALDI which is popping stores across the street from all of their stores in Illinois.  Besides who wants to walk a mile  to buy groceries

Thu, 04/02/2015 - 07:17 | 5951558 BurningFuld
BurningFuld's picture

+1 for the fuck Walmart. Just fucking stop shopping there people.

Thu, 04/02/2015 - 08:01 | 5951614 Professor Fate
Professor Fate's picture

I say Peak Walmart.  The short is in and its time to buy puts.

Fate the Magnifiecent

"Push the Button, Max"

Wed, 04/01/2015 - 22:28 | 5951075 Manipuflation
Manipuflation's picture

The wages went up a few percent but the prices any wage earner has to pay for basic neccessities went up 20% YOY.  Fucking fantastic isn't it?  It's the magic of central planning economic growth. 

Wed, 04/01/2015 - 22:33 | 5951086 847328_3527
847328_3527's picture

Speaking of Big Corporations, here is a shocker!

 

"Today Amazon (AMZN) announced it has entered into a definitive agreement with the United States Post Office for the purchase of over 1,200 US Post Office locations nationwide. Also included in the agreement is over 8,500 delivery trucks which will be rebranded as Amazon Prime for Local Folks (APRFLS).

In a press conference announcing the deal, Amazon spokespersons stated the former post office locations will serve as a secure bases for drone deployment for last mile shipping where appropriate. Shares of FedEx (FDX) and UPS (UPS) were down in after-hours trading.

Existing storefronts will be converted to click and collect points for Amazon orders and include drive-thruin what it is calling Prime Express PickUp. "For certain items like groceries, consumers would prefer to pick up items rather than have them delivered." Said Redd Thomas, VP of Common Sense and Retail Disruption at Amazon. "Now we can offer items that are refrigerated, frozen, as well as general groceries. We will even have displays with gossip magazines, mints, and chocolate bars so we don't miss out on the impulse purchases."

The announcement puts to rest the speculation that Amazon was going to purchase existing Radio Shack locations instead.

"Quite frankly, we looked at the Radio Shack and former Kmart locations for distribution," said JP Rooster, Omnipotent Vice President of Omnichannel Customer Centricity for Omnicommerce at Amazon. "They simply didn't have the same potential to lose money on shipping costs as the former USPS locations. Now if we can just figure out how to get packaged oatmeal into a box smaller than the average VW we would be golden!"

Amazon is expected to have a secondary debt offering to pay for the purchase. Analysts don't expect the purchase to have a material effect on earnings because it comes with a lifetime supply of Forever stamps. Barring SEC approval, the transaction is expected to close on April Fools Day, 2015."

Wed, 04/01/2015 - 23:46 | 5951242 RabbitOne
RabbitOne's picture

 

Stupid move. Some of us were not paying sales tax. Now we will….

Wed, 04/01/2015 - 23:49 | 5951248 Peak Finance
Peak Finance's picture

I am starting to hate April Fools day in our new normal. IS this real or not? 

Thu, 04/02/2015 - 03:46 | 5951442 HowdyDoody
HowdyDoody's picture

Check The Onion. If it is there, it is real.

Thu, 04/02/2015 - 16:06 | 5953334 Mr. Frosty
Mr. Frosty's picture

People in the Twilight Zone are watching us at this point

Thu, 04/02/2015 - 08:10 | 5951631 Professor Fate
Professor Fate's picture

Hmmm...so does Feinstein's husband Blum get a piece of this action too?  Let me guess.  Is there a CBRE commission involved here?

Fate the Magnificent 
"Push the Button, Max" 

Thu, 04/02/2015 - 09:45 | 5951899 swmnguy
swmnguy's picture

Amazon Prime for Local Folks (APRFLS).

Excellent stuff.  Plausible, too.  Especially the wacky job titles those "New Economy" companies like to have.

"New Economy."  When was the last time you heard that one?

Wed, 04/01/2015 - 22:44 | 5951107 Van Halen
Van Halen's picture

The problem of wages can be averted by never ever listening to Chicago Marxists' advice about wages in the first place.

Wed, 04/01/2015 - 22:46 | 5951110 Jack Burton
Jack Burton's picture

McDonald's and WalMart. Two mega corporations, both of which I can and do live without. McDonald's filt not fit for a dog. And WalMart everyday low prices paid for by everyday low wages all across the supply and retail chain, except at the top.

Fuck 'em both! Don't need 'em, don't want 'em, don't use 'em!

Wed, 04/01/2015 - 23:06 | 5951162 sun tzu
sun tzu's picture

I used to think Walmart was the cheapest but found many other better alternatives. I do my grocery shopping at an employee owned supermarket chain now. Prices are much better, by 10-20% on most items.

Thu, 04/02/2015 - 18:35 | 5953811 mkkby
mkkby's picture

Yep.  Never saw a reason to shop at toilet mart.  The prices are not lower than other stores.  The grocery section is way more expensive than supermarkets nearby.  It's more like convenience store garbage and high prices.

Toilet mart is for stupid sheeple who aren't smart enough to realize they're getting a bad deal.  You can say that about most big corp stores and restauarants as well.

Wed, 04/01/2015 - 22:47 | 5951115 NoWayJose
NoWayJose's picture

Maybe 3 years ago, Walmart was the low price leader -- not today

Wed, 04/01/2015 - 22:51 | 5951124 Omega_Man
Omega_Man's picture

CEO pay up = good.... worker pay up = bad...

 

 

BS.

Wed, 04/01/2015 - 22:55 | 5951125 i_call_you_my_base
i_call_you_my_base's picture

Wage increases for your employees and price increases for customers who are also employees is a net push. Only mcdonalds workers eat at mcdonalds.

Wed, 04/01/2015 - 23:07 | 5951167 sun tzu
sun tzu's picture

It's also popular with the EBT crowd. 

Thu, 04/02/2015 - 06:36 | 5951525 Refuse-Resist
Refuse-Resist's picture

Even where I live, with 30% unemployment and a median wage of <$10/hour, McDs is packed every day at lunch.  I note that most of the customers have a BMI well over 30, and not because of their muscle density and low body fat.

 

Whale watching at WM and McD's, the new pastime for healthy fuckers.

Thu, 04/02/2015 - 07:37 | 5951581 GMadScientist
GMadScientist's picture

You feel smug until you realize you're paying for these momo's healthcare.

Wed, 04/01/2015 - 22:54 | 5951132 williambanzai7
williambanzai7's picture

This can only mean one thing, more share buy backs...

Wed, 04/01/2015 - 23:16 | 5951177 Manipuflation
Manipuflation's picture

And 29 check out lanes which are closed with the other three being attended to by three "associates" up to and including the associate at the head of the self checkout lanes who has to be there because invariably a customer will get lost in the produce menu.   

Thu, 04/02/2015 - 07:39 | 5951582 GMadScientist
GMadScientist's picture

Eventually the banality and price-fixing will allow a single entry fee to be charged so you can walk out with as much as you can carry sans checkout.

Mmmm boy! Cheaper than food!

Wed, 04/01/2015 - 22:57 | 5951139 Catullus
Catullus's picture

Being a vendor to the Walmart is idiotic in itself. Tell them to pound sand. They're the ones with no leverage

Thu, 04/02/2015 - 06:22 | 5951511 Anglophobe
Anglophobe's picture

i am a vendor for the 3rd biggest bev company and i can tell you walmarts blow... they are assholes !

Thu, 04/02/2015 - 07:40 | 5951585 GMadScientist
GMadScientist's picture

"....and that's why I'm no longer an account manager, Honey."

Wed, 04/01/2015 - 22:59 | 5951142 Kreditanstalt
Kreditanstalt's picture

"Growth in hours worked" actually means that those senior employees, technician staff, management and resource industry employees who never lost their jobs or suffered salary cuts during the recession are now busy working as many hours as they can, while zero new hiring is happening.

No wonder my logger and oil & gas neighbours have all the new toys...

Thu, 04/02/2015 - 07:41 | 5951587 GMadScientist
GMadScientist's picture

Yep, the high-tech analog of 1/32 open cashiers.

Your oil and gas neighbors will be getting visits from the repo man soon.

Wed, 04/01/2015 - 22:59 | 5951148 DaveA
DaveA's picture

This is Walmart's point of view: If your products are already on our shelves, you might as well lay off your entire advertising department and pass the savings on to us. Whenever you have a new product to sell, give us a call and we'll consider stocking it.

And I tend to agree with them. A million dollars spent on advertising does not add one penny of actual value to the product. In the wild, animals compete for food and plants compete for sunlight. On a well-managed farm, there is no competition -- every plant and every animal receives the correct amount of everything it needs.

Wed, 04/01/2015 - 23:04 | 5951160 i_call_you_my_base
i_call_you_my_base's picture

Marketing is a part of doing business. Whether it's word of mouth, "tell your friends," a sign on the side of a road pointing to your store, or whatever. Marketing is not bullshit in concept, only in practice and taken to the extreme. You're reducing business to absurdity. "Build it and they will come." Good luck with that.

Wed, 04/01/2015 - 23:18 | 5951185 DaveA
DaveA's picture

That stuff matters when you're just getting started. Once you convince major retailers to carry your product, you've died and gone to Heaven as far as marketing is concerned.

Thu, 04/02/2015 - 07:43 | 5951590 GMadScientist
GMadScientist's picture

In the wild, animals use "advertising" constantly; we're here to prove it.

Titties! (made you look)

Wed, 04/01/2015 - 23:03 | 5951154 396
396's picture

Always a race for the lowest denominator. Food inputs that are destroying the health a nation. Oceans and forests dying. Over taxed and stressed populations. Plastic goods and plastic people. Promises made that will never be repaid. Destroyed countries everywhere. Pyschopaths in charge. Fucking beam me up Scotty. There's no intelligent life down here.

Wed, 04/01/2015 - 23:21 | 5951186 kchrisc
kchrisc's picture

Like flapping one's arms after falling off of a cliff.

The banksters need to repay us.

Wed, 04/01/2015 - 23:22 | 5951189 Bumbu Sauce
Bumbu Sauce's picture

Do business with neither.  It is hard to compel those that live on tight budgets to spend a few dollars more elsewhere, but this isn't going to end well.

Wed, 04/01/2015 - 23:30 | 5951206 Yen Cross
Yen Cross's picture

  Blub blub Blub goes the PPI & CPI when suppliers get hosed with price cuts and the consumer gets hosed by price increases.

Wed, 04/01/2015 - 23:48 | 5951246 adr
adr's picture

The problem is that you used to have high school kids working at McDonald's and Walmart. $4.75 was plenty of money for them. It was when I worked at a music store for $4.50 an hour in high school.

Now Walmart and McDonald's is a career job since there is nothing left and you can't live off $10 an hour. Raising wages at low level jobs only results in massive inflation, lower sales, and eventual economic collapse.

The wage increases have already caused massive price increases. Big Mac meals have hit $8 at some places. A frickin taco at Taco Bell is $1.69, A DOLLAR FUCKING SIXTY NINE!!! Just a few years ago they were $.59.

Toys R Us just increased the price of a few toys from $15 to $20. Target raised Star Wars figures from $9 to $13. The same figures that were $5.99 three years ago. 100% inflation.

Wed, 04/01/2015 - 23:49 | 5951247 RabbitOne
RabbitOne's picture

Those on soc sec did not get a 30% raise. Done buying burgers. I will make my own...

Thu, 04/02/2015 - 00:50 | 5951313 Grosvenor Pkwy
Grosvenor Pkwy's picture

Both McD's and Walmart have proven that no matter how bad something is, you can always make it worse.

Thu, 04/02/2015 - 01:06 | 5951328 theyjustcantstop
theyjustcantstop's picture

I think these big co.'s are a few dollars, and a few years to late.

they sided with the politicians, pressed for immigration, now their getting an ever increasing illiterate, unproductive, give a shit workforce, which everyone one knows, is costly.

$9.00 bucks an hour isn't going to get anyone off entitlements, (proven to be valued at $15.00, or more), and your workforce will continue to deteriorate.

then try to keep your business when the seiu unionizes your workforce.

 

Thu, 04/02/2015 - 01:28 | 5951351 OldPhart
OldPhart's picture

We're in California.  We're offering $18 an hour for local drivers.  Can't get any to give up benefits and work.

Thu, 04/02/2015 - 07:49 | 5951596 GMadScientist
GMadScientist's picture

Wal-Mart has done a good job busting unions in Fontana (Fontucky) where they load all the plastic crap you idiots line up to buy there into trucks to drive it to your fat asses. Everyone is a contractor and they rotate them from middleman to middleman to insure they can't organize effectively.

At some point, people may wake up and realize they're shopping at and working for the US equiv of Foxconn, but they seem to like it that way so let em sleep I guess.

If you think the dwindling US unions are your problem, you're probably not paying close enough attention to who is really giving you the shaft.

 

Thu, 04/02/2015 - 01:58 | 5951382 PennilessPauper
PennilessPauper's picture

The entire world is a Ponzi scheme! Nothing Humans do is sustainable!  But, I believe its important that we try.  As Hillary Rod-ram Clitoris would say.  "Think of the children".

Go ahead and raise the minimum wage to $100 an hour watch the Titanic deck chairs being rearranged!

The Alpha Strategy has the answer.

http://www.amazon.com/Alpha-Strategy-Ultimate-Financial-Self-Defense/dp/...

 

 

Thu, 04/02/2015 - 02:13 | 5951390 wwxx
wwxx's picture

O

O       If I'm wrong, be sure to vote me down.

 

Lets be sure of one thing, that McDonalds & Walmart have already 'trained' their labor for 'many positions'.  This is 'just another' example of the new normal-- it is like have 3 employees in the body of 1 person.  The corporation calls it flexibility, this exists because upper management intends it to be this way.  It isn't about creating a better educated, experienced labor force, with the hopes of some semblance of future corporate success, it is about 3:1.  Only those with 6:1, or 10:1 have any shot at becoming part of the real cutthroat management team. 

 

In this way, lower & mid management routinely delegate management responsibilities of proper training, orientation, scheduling, payroll, marketing, overseeing the fucking store for crying loud, etc.,  with no increase in pay, for the dingdongs that have it thrust upon them.

 

The article says 90,000 dingdongs will get a raise, and no mention whatsoever of a simple 'personal working contract'.  The reason is because the new normal demands no work related contract.  They don't get a personal working contract nor an unionized contract in: (enter your third world country of choice here) and the race to the bottom of the ditch in the USA, excludes labor & even vendor rights by lack of labor definition via contract...just ask Bill Clinton/congress (NAFTA).

 

Just try to imagine how quickly-screwed your local McDonalds would be if the management actually had to create a crew schedule and stick with it.  Training of an employee under a labor contract would require more than throwing a 'T' shirt or smock at the person and saying: "Jimbob has 3 days experience...he will show you how to do it~~~ if your lucky.~~~:D"

 

Oh yeah and these companies don't respect their customers, their product, their money, nor their labor because they get away with this new normal bullshit daily, and they are absolutely in favor of importing from overseas anybody that will work for less.

 

wwxx

 

 

Thu, 04/02/2015 - 05:50 | 5951486 TweedleDeeDooDah
TweedleDeeDooDah's picture

When I read about "razor thin margins", then think about the fact that a huge company like WalMart had gross profit of almost $130 BILLION last year, while at the same time instructing their near-poverty full-time employees to take advantage of every kind of welfare possible, I have to really consider the disconnect with reality, the blatant bias, the apparent bounty of stupidity, or perhaps the complete emnity towards the readers that whoever wrote this article posesses.

Thu, 04/02/2015 - 08:02 | 5951617 jay28elle
jay28elle's picture

I think you have somewhat overstated WalMart's financials.  Gross Income was $120 Billion last year.  Net Income was 'only' $16 Billion.  A far cry from representing gross profit of $130 Billion.  

Net Revenue/Sales of $480 Billion to $16 Billion of Net Income is a profit margin of 3.33%.

Dividend payments in 2014 were ~$14 Billion.

Not real sure where a lot of extra wages can come from, except possibly from C Level compensation, or as this article is pointing out, from it's upstream vendors.  Off hand a 10% increase in wages may cut seriously into dividends...

Thu, 04/02/2015 - 09:55 | 5951926 plane jain
plane jain's picture

Not that big a deal IMO. The wage increase is only for the very very bottom of their payscale; people making the state minimum wage.

And I also don't think it has a thing to do with being nice, or doing the right thing.

All things being equal, would you rather work a minimim wage part time job for a local small business with a manager who might work with your schedule, or the Wal-nazis who expect you to come in with an hour notice, and then the next week may tell you to "take off" one of your scheduled days because sales number are lower than forecast for the week?

Thu, 04/02/2015 - 06:25 | 5951514 1stepcloser
1stepcloser's picture

All this is going to do is Fuck with their additional welfare subsity.  

Thu, 04/02/2015 - 06:30 | 5951517 22winmag
22winmag's picture

Someday McDonalds will be to pseudo-food what Radio Shack was to electronics.

 

A chronic underperformer and mismanagement posterchild.

Thu, 04/02/2015 - 06:59 | 5951543 MathWins
MathWins's picture

Same thing the auto industry has been doing for years.  My husband and I owned a small auto supply business back in the 80's & 90's and every contract renewal at the big 3, they gave the bank away to the union and then came to suppliers and said, "We need a price decrease".  They still are doing it today.

Thu, 04/02/2015 - 07:14 | 5951555 Doug
Doug's picture

So the Walmart worker makes an extra buck an hour - taken right out of the pocket of the vendor worker who now makes a buck an hour less.  Zero sum game.

Thu, 04/02/2015 - 07:16 | 5951557 goldinpenguin
goldinpenguin's picture

Vendors will be forced to find lower assembly in SE Asia or India, Walmart is actually squeezing China Inc

Thu, 04/02/2015 - 07:57 | 5951607 deerhunter
deerhunter's picture

I took a job for 11 bucks an hour in an electric control panel shipping department back when I was downsized.  I thought I had stepped back into an industrial revelution sweat shop.  The individual who owned this business routinely ranted and raved at his employees.  I was so shocked when he first went off on my coworker I was looking for the Candid Camera crew.

I was there about a month learning all the procedures when while wrapping some control panels for overseas shipping my coworker somehow fell from the top of one which was about a ten foot drop to concrete floor.  His butt then shoulder then head hit concrete roughly the same time.  The sound of a head hitting concrete is somehing I wont soon forget.  The owner of the company refused to call 911.  He put my coworker in his asshole sons car and dropped him off at a medical clinic.

As soon as the medical clinic realized it was a serious head injury they called 911 and had paramedics transport him to the hospital.  The owners son came back to the plant and said to me shipping was now all on me and he was very glad my coworker didnt throw up in his car but waited at least til they got to the parking lot at the medical clinic.  I looked at him in disbelief and told him he was pond scum and walked out and never looked back.

Businesses are owned by people and run by people they employ.  When you quit treating people as human beings you have become a lost society.  I am almost 60 years old.  I have lived a very "unsheltered" life.   I have never seen human beings treat another like my shipping buddy was treated.  People are desparate to work.  Imagine working 20 years for a bastard family like that ownership?  Imagine.  I worked a 45 hour week for that bastard to get after taxes the equivelent of a months worth of free food via the EBT program. 

I made well over 90 k a year for many years.  Last year i made just under 9.  I love it.  I no longer pay into the support the monster economy.  Yet working a full week in those conditions and then stopping at the grocery store waiting behind someone with a cart full of junk food paid for by EBT made me scratch my head.  Not only was I buying my own groceries I was buying theirs.  No big deal you say?  Take the worst ever job you have had and then stand in that same grocery store line.

While I was making real money my health insurance premiums were shared with my employer on a 60/40 split basis.  From 2005 to 2009 my out of pocket for a so-so health insurance plan had gone from 270 a month to 485 a month.  Not a killer for some one making what I was.  That was just the wife and I .  I now have nothing.  I am a 1099 factory sales rep.

We are well and truly fucked but having said that,  starter jobs have never meant to support anyone with a roof over their head and a car in the garage. They are called minimum wage for a reason.  When government dictates wages it applies to everyone but government employees.  How about we cut all governement employees salaries and benefits across the board by 30% and have them pay the Walmart and McDonalds employees with their money.

Here in Chicago land the burger flippers want 15 bucks an hour.  Ready for a 15 dollar Big Mac combo meal.  Why dont we just start a Crowd Fund account for all the McDonalds workers and pay them 25 dollars an hour.  Disclaimer.  I flipped burgers for two years in high school.  Home from work at 1130 at night.  1.60 an hour.  72 and 73.  If that had been a full time job at the time my take home would have been 48 dollars a week.  I rented my first apartment right out of high school and not at age 26 on mom and dad's insurance plan.  Rent was 300 a month.  I shared it with a room mate.

They are starter jobs.  It is no ones business what CEOs make unless you are interviewing for the position.  I heard all that shit from a buddy who worked in a union employee staffed food distribution ware house.  When he began there he started at 485 an hour.  1974.  At that point i was working as a meat cutter for almost a year and had just gotten to 380 an hour.

Starter jobs.  Minimun wage.  With EBT.  Free government medical coverage.  Housing allowances.  A lot of those McDonalds workers are better off than I am.  No insurance.  Too young for medicare.  Too young for SS.  I work.  If I sell I eat.  If i don't I make no money.  Sorry for the wordiness,,, frustrated.  Minimun wage is just that.  Minimun wage.

 

Thu, 04/02/2015 - 08:18 | 5951640 overmedicatedun...
overmedicatedundersexed's picture

in movies everybody has everything..cause in real life we are all heading to third world living.

we need drugs we need sports we need bs movies..anything to escape from our reality

the sociopaths can't understand why anyone complains.

 

http://www.clinteastwood.net/realmediafiles/soundclips/deserves.mp3

 

Thu, 04/02/2015 - 08:33 | 5951670 Mike Honcho
Mike Honcho's picture

Good post.  Hopefully that vent will shake off some of the frustration, similar stories abound.  Sell man, sell!

Thu, 04/02/2015 - 10:10 | 5951970 swmnguy
swmnguy's picture

No doubt the electronics shipping company contested the guy's Work Comp and Unemployment claims, and probably won.

I worked flipping burgers as a youngster too.  A few years ago I found my last pay stub from about 1984 in a box I was cleaning out.  I worked 38 hours at $3.35/hour.  I was docked $0.75 per shift as a "uniform fee" for a filthy shirt I had to launder.  That 38 hours was split into about 12 3-hour shifts; they would have me clock out after 3, then come back in 2 hours to clock back in, so I'd work 6 hours or even 9 in a day, with the $0.75 giveback every time.  All told, my check was for something like $75.  My co-worker probably made 50 cents an hour more than I did.  He was married with 2 kids.  His wife waited tables.  There were, literally, no other jobs in my hometown.  God knows I was looking, and I'm sure he was too.  He finally did find another job; he confided in me with glee that they offered him $4.00 an hour on the spot.  He was looking forward to some good times, man, good times.

Whatever the particulars, things have gotten worse since I was a kid (I'm pushing 50 right now).  The Welfare State is subsidizing low-wage employers far more now than they used to.  But add it all up, and while those people might be making more money than you are now, it's hard to call them "better off."  I know exactly what you mean about the grocery store.  I routinely spend $100 there, but I can feed myself, my wife, and our 2 kids on that for the better part of a week because we know how to cook.  We buy actual food ingredients, and turn them into meals.  But I always see obese people with carts overflowing with pre-made chemistry-set non-food product, and even that $400 cart won't see them through the week.  Plus it's all empty calories; carbs, fat, salt, and "flavorings."  And of course high-fructose corn syrup.  They've been sick as dogs for so long they think being mortally ill feels normal.

The bottom line is, when work doesn't pay, something's got to give.  On a macro level, we can all see that.  On the personal level, the challenge is to survive.  That's the hard part and I don't know what to tell you.  I would suggest that a "job" isn't going to do it for you.  You need to figure out a way to do what you were doing when you were making $90k, as an independent, and sell that service to the people who weren't willing to pay you $90k to do it anymore.  That's what I did 11 years ago, except the people I left were paying me $60k, and I'm now bringing in about $100k.  It's actually about the same amount of money, when you consider inflation and the total cost of employment.  Except where I once only had 1 client, now I have about 20.  Losing one client is a lot less traumatic now.

Good luck to ya!

Thu, 04/02/2015 - 08:33 | 5951672 2muchtax
2muchtax's picture

CEO pay is out of control because investors are not holding voting shares. When you put money into a fund instead of buying voting shares you're endorsing their pay. The retirement system is designed to concentrate voting shares into the hands of a very small group.

WallyWorld pays shit wages because of our broken welfare system. If they paid 100% profits to employees, their employees would still collect 21,000,000,000 in welfare per year, (2012 numbers, assuming domestic employees only).In other words, their prices are directly subsidized by welfare. Your $1.98 cereal is actually $2.19 after you pay the welfare tax.

The Walton family are big Democrat supporters, they are also the largest gun dealer in the world and very anti-union. Ever wonder how the largest employer has avoided unionization.

 

 

Thu, 04/02/2015 - 09:04 | 5951759 shovelhead
shovelhead's picture

Boo hoo the WalMart vendors.

To be a vendor to Wally, you already are a multinational corp. simply because you wouldn't be able to produce the volumes that Wally requires if you weren't in that league.

Those vendors have their own hoards of overcompensated fat cats to extract wages from to make up the cuts Wally wants, if they wanted to, rather than the shlub on the production line.

These guys know how the game is played because they play it too.

EVERY organization has it's 1%ers and protecting THEIR earnings is their foremost concern.

You want to dance to the Devil's fiddle, fine, but never forget you will always dance to his tune.

Or rather, your lowest paid people will.

Thu, 04/02/2015 - 09:25 | 5951831 Chuck Knoblauch
Chuck Knoblauch's picture

What would happen if Bentonville was nuked?

Would anything change?

Thu, 04/02/2015 - 10:07 | 5951967 Reader1
Reader1's picture

I'm not an expert, but it seems to me the real place to trim the fat is at the top.  My guess is a newly-minted MBA fresh out of school could get results equal to, or better, than the current perfumed princes.  It would make an interesting experiment: 6 months for Bill to goof off on the green and 6 months for Waldo to hang up his degree and put his training to work.   

My spouse is an international accountant, did the big 4, and has worked for some of the biggest corps out there.  The stories I've heard are incredible.  They can't necessarily go into too much detail, due to confidentiality, but the lesson is the bigger a business gets, the dumber it gets and the more they hemmorhage cash left and right, like some big, retarded out-of-control supertanker that hit a reef and no one knows, or cares. 

They were telling me, for instance, about how their business at the time was paying bills from suppliers several times over.  No one noticed, or cared, and the suppliers weren't in any hurry to point out they were getting overpaid.  Their sales team were eating them alive, too, partying with potential customers and living a very, very comfortable life.  One manager was using their company card to keep a mistress in a hotel. 

Another business they worked for was a loss leader.  No Xmas party, no bonuses, no nuthin' for the employees, because the company never turned a profit (this was a telecom).  At the same time, however, they paid to fly the CEO from Colorado to the East Coast every week and back home on the weekends.  They also rented him an apartment in one of the swankest professional residential/shopping neighborhoods in the area and furnished his place for him.  When he was let go, he got 3 years' severance AND was brought back 3 months later as an independent contractor.    They merged that company with another and required employees to train their replacements and remain until the transition was complete to find out if they were terminated. Severance for terminated/bonuses for survivors was contingent upon staying through the merger and the surprise! layoffs that came afterward.

They were telling me how no one knows what's happening, or how bad it really is, but the accountants see everything.  When this same company was on the verge of collapse, the employees were blithely unaware of just how poor the situation was in the company and just how close they were to all being replaced.  Eventually, they called everyone into an office, sent half the group to another room, and let those poor bastards know they were fired on the spot.

 They told me one of their big problems was the off-shoring of business to India.  I never knew this, but businesses offshore accounting to India.  The problem they find, however, is Indians are hard workers, but not necessarily good workers.  They're forced to be loyal to their boss, and will sit at their desk all night if ordered, but do not do very good work and are routinely abused and terrorized by their asshat supervisors.  They're not motivated or even very good at what they do, just determined to keep their jobs.  Plus, it's hard to coordinate work when the office is on the other side of the planet and a dozen timezones away.  So they were forced to bring the accounting back to America, then offshored it again to Guatemala. 

Thu, 04/02/2015 - 09:22 | 5951820 Chuck Knoblauch
Chuck Knoblauch's picture

It cuts benefits.

That was a silly question.

I didn't even have to read the article to figure that out.

Thu, 04/02/2015 - 09:44 | 5951889 Dr_Snooz
Dr_Snooz's picture

"it cripples the cost and wage structure of the entire ecosystem of vendors that feed into it, and what takes place is a veritable avalanche effect where a few cent increase for the lowest paid megacorp employees results in a tidal wave of layoffs for said megacorp's vendors."

That's a pretty bold claim. I assume you have lots of evidence to back that up that you just forgot to include here? I've heard no announcements of layoffs or bankruptcies from WMT's vendors.

"they will either reduce wages of its own workers or, comparably, force their own suppliers to reduce pricing, and so on, until ultimatly the entire economy is gripped in wage deflation."

Yet WMT just announced wage _inflation_. How does that magically turn into wage deflation? I assume, again, that you have lots of evidence to substantiate this claim that you just forgot to put here for the rest of us to see.

Unless you're a rank simpleton, you know that businesses can deal with rising costs and diminishing margins in a variety of creative and competitive ways. Reducing wage costs is only one way, albeit a popular one for some years now. Another way that no one seems to want to discuss is to reduce the obscene bonuses that CEOs reward themselves. A popular way in the '80s and '90s was to reduce layers of well-paid but essentially useless middle management bureaucracy, and return decision-making to the line workers. There are many others. Bosses are just going to have to get creative now and stop stealing from workers.

Thu, 04/02/2015 - 10:06 | 5951965 freedogger
freedogger's picture

Looking back ten years from now this move won't even be a footnote once the robots have taken over these jobs.

Thu, 04/02/2015 - 12:01 | 5952370 cornflakesdisease
cornflakesdisease's picture

Just a little clearification.  A lot of compnies WILL NOT do business with Wal Mart anymore and do not wish to sell anything through their stores.  That is why at Wal Mart you have Wal Mart cheese and Kraft.  There is no selcetion.  That is it.  But if I go to my local grocery, they have 7 or 8 brands of cheese.  They don't squeeze their vendors.  And people love that they have a good variety.  Wal Mart's market share is being eaten alive.  Wal Mart can't even keep basic product on the shelves.  They are hopeless and doomed.

Wal Mart is your store of last resort. 

PS  I love it when my cashier has a gang tattoo on her neck.

Thu, 04/02/2015 - 14:23 | 5952955 all-priced-in
all-priced-in's picture

I learned this when I was 12 years old - I am amazed it is such a fucking secret - so maybe this can help some of you helpless fuck-heads.

 

I got an after school job - the owner was an asshole - treated people like shit, pay was minimum wage and he worked you like a fucking dog.

 

I found a different job with a nice guy that paid me $.75 an hour over minimum wage -

I told my old boss to go fuck himself and quit.

 

If you don't like the company you work for -  

 

Find a different job.

 

If you don't like your pay -

 

Find a different job.

 

If you have no skills so you can't find a different better paying job -

Take a class - learn a trade - do what you need to do to improve your skills and then

 

FIND A DIFFERENT JOB!

 

Anyone that thinks working at McD's or part time at WM stocking shelves is a career that will earn you enough to live a great middle class life - you need to wake the fuck up - pull your head out of your ass and

 

FIND A DIFFERENT JOB.

 

 

 

 

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