Buy in large and bulk retailers seem to be in style these days. Wal-Mart is no exception. I’ve heard stories of protest over one company joining the local economic circle being protested. One of these companies is Wal-Mart.
For support of mom and pop shops, Wal-Mart’s openings have been disputed in many areas. Some feel they are just what the government ordered, while others have praised their opening. When I lived in Louisiana, the opening of a local Wal-Mart meant things were on the up and up. Business was booming and if a Wal-Mart was suggested, it meant that all your economic numbers were on the increase. But over the years and across state borders, this outlook has changed.
Many see the opening of a Wal-Mart as the end of all business. Local family owned industries were looked at as if they were set to be closed and Wal-Mart was the reason to blame. But upon further analysis of the infographic below, it made me wonder whether or not Wal-Mart should be praised or scowled at.
One of America’s own is the leader a major leader in revenue, sales, and manpower. Wal-Mart, in some ways, embodies that American dream better than any other company known to man. Should we hate it or embrace
There’s never been a better time to be a consumer. It’s not such a happy story for the people on the shopping floor and behind the counters.
Reuters
Retail sales just notched their best month since 2012 and the industry has added almost one million jobs since 2010. But the rosy headline stats obscure a more complex and potentially troubling story in retail—particularly for its employees.
The business of selling stuff is becoming much more efficient. Sales-per-employee have gone from $12,00 to $25,000 in the last two decades. That means that even as consumers spend more, we need fewer workers to stock shelves and process orders.
One reason retail has become so efficient is that more of it is happening across Internet cables rather than across registers. E-commerce is gobbling up one percentage point of total sales every two-and-a-half years. Call it the Amazon Effect.
And then there’s the Walmart Effect. As I’ve reported, one Walmart worker replaces about 1.4 local retail workers, so that a county sees about 150 fewer jobs in the years after a Walmart opens its doors. Combined with the Amazon effect, this has dramatically reduced our need for retail workers to sell things, and so retail’s share of the labor force, which peaked in the late 1980s, has been declining ever since.
This isn’t the end of retail. But it is the end of someretail.
According to data obtained by The Atlanticfrom EMSI, the retail industry gained about 49,000 jobs between 2001 and 2013, which means it grew by exactly 0.32 percent. Which means it didn’t grow.
But the major action is at the bookends of this graph below, which shows employment growth in the largest retail subcategories. Department stores, like JCPenney, lost more than 200,000 jobs this century. But supercenters like Walmart, which operates in more than 3,200 domestic locations, added half a million (often lower-paying) jobs.
The death of the salesmen isn’t a uniform trend. It’s spiky. Supercenters nearly doubled their total employment this century. But music stores, photo stores, computer stores, and book stores have been crushed. These used to be services you needed a store to buy. Now they’re apps. (Click this image to enlarge.)
Retail is already a famously low-income industry. According to the Fed, real hourly earnings for retail workers has actually decreased since 2007, the year the recession struck. The upshot is that we’re seeing a large industry stricken by the rise of the Internet, which is growing fastest into supercenters like Walmart that pay regularly low, if not minimum, wages to its employees. For consumers, there’s never been a better time to buy stuff. It’s not such a happy story for the people on the shopping floor and behind the counters
While it’s unclear how many of Walmart’s workers are on food stamps, as many as 15 percent of the company’s employees in Ohio are. Applying that same percentage to the rest of Walmart’s workforce, Marketplace estimated the company would need an extra $4.8 billion to lift its average wages across the U.S. enough to get all of its workers off public assistance.
Marketplace gets to its $4.8 billion figure by using an average wage for Walmart sales associates of $8.81 an hour. This figure, which was also cited in the congressional report by House Democrats — comes from market-research firm IBISWorld. Three years ago, an analyst at IBISWorld calculated the average based on job listings in urban areas, and posts submitted to the employer review site Glassdoor showed entry-level Walmart workers earning between $7 and $14, an IBISWorld spokesman told The Huffington Post.
Walmart spokesman Kory Lundburg told HuffPost the $8.81 figure was inaccurate.
“We don’t know how they arrived at that number,” Lundburg said in a phone interview. “It’s so off it’s laughable that they even try to cite it.”
He said waged workers earn $11.83 an hour, on average, and that 99 percent of the company’s employees make above the minimum wage.
In any event, Marketplace estimated that Walmart would need to raise average wages for low-level employees from $8.81 to $13.83 to get its workers off food stamps. And that would cost, in total, $4.8 billion.
Walmart is a mammoth company, so it would only need to raise prices by about 1.4 percent to cover that cost, Marketplace estimated.
To see what all this means for your mac-and-cheese, let’s walk step-by-step through Marketplace’s calculation:
Sales associates in urban areas earned an average of $8.81 an hour, according to the IBISWorld research number cited by Marketplace
A single mom working at Walmart for that wage might be eligible for food stamps. A two-person household can earn as much as $20,449 per year and still qualify.
For this single mom to no longer quality for food stamps, she would need to earn about $13.63 per hour at an average number of retail hours.
Paying that to employees claiming one dependent and working 30 hours a week, a federal average for retail workers, would cost Walmart an additional $4.8 billion each year. And unless the company wants to eat that cost, it would pass it on to customers in the form of higher prices.
How much higher? On average, about 1.4 percent, by Marketplace’s estimate.
How would that affect Walmart shoppers in real life? Well, a box of macaroni and cheese, which ordinarily costs this much:
Would now cost this much:
So paying this much more per box of macaroni and cheese:
Would save the government this much in food stamp costs each year:
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