the smedley log - suburban scrawl

How about just chipping away a little, please?

Cziltang analyzes some of the same Wal-Mart information I sifted through last weekend, but he comes to a slightly different point of view on it.

I encourage you to read his thoughts on it. He doesn’t merely voice his opinion on Wal-Mart, but he analyzes the basic financial breakdown of what might become of the big blue retailer’s $10 billion profit, should Wal-Mart go full-tilt in favor of social responsibility. Drawing on numbers from the UFCW, he chips away at the gargantuan profit margin, until he ends up relocating it firmly in the red. His analysis is worth a read, and brings up a side of the discussion that is legitimate:

Now remember, Wal-Mart is a huge company that made $10 billion in profit last year so they’ve got the money to treat their employees right if they wanted to or were forced to, right? Except that that “average” $3.73 per hour raise to bring the “average” employee up to the BFB requirement costs an “average” $8.5 billion dollars. And picking up the health care coverage tab costs another $3.4 billion. (That’s $11.9 billion for those playing along at home.)

So now that $10 billion per year profit is now a $1.9 billion per year loss. … (read the whole post)

I don’t argue with his math. Even if it isn’t perfect, it’s pretty close. My only argument is that of all the people (like me) railing against Sam Walton’s legacy of corporate greed, very few expect a Wal-Mart job to be the best career choice in terms of wages and benefits. Of course you don’t take a job at the cash register of your local Wal-Mart to strike it rich, or in most cases, to even live comfortably. But when a company consistently makes so much money, it can, and should do more to help its own employees, especially when said company has been consistently recognized as contributing more than any other company to welfare and medicaid costs. We don’t need to have Wal-Mart cashiers making fifteen dollars an hour and receiving earth-shattering benefit packages. But wouldn’t it help just a little to have at least one of those things happen? Or how about moving half-way on each ideal?

No reasonable person wants Wal-Mart to go under, resulting in a million people being added to the unemployment list. But if Wal-Mart could only reach half of the ideal, wouldn’t that be better than nothing?

I think so, and I think a lot of those UFCW organizers would be pretty happy to just get that much for hundreds of thousands of Wal-Mart workers who desperately need it. And is there really any excuse if Wal-Mart isn’t even trying?

Okay. As for that last paragraph, I really can’t profess any expertise on what level of compensation the UFCW would settle (or be happy) for. Still the simple fact is, if Wal-Mart was fulfilling any reasonable level of the outsiders’ compensation goals, and if their own employees weren’t so likely to fuel allegations of abuse, they wouldn’t be in the cross-hairs of so many labor and social activism organizations.

I’ve worked in management for non-union enterprises that consciously maintain their level of compensation simply to avoid the prospect of being targeted by labor organizations. The basic idea is (and it’s almost universally true): If your employees have no reason to want to join a labor union, then you have no reason to fear labor unions.

Clearly, this isn’t the motto Wal-Mart follows…

Yeah, I thought my conclusion was a bit weak. All I was really trying to say is that when you are talking about something as big as Wal-Mart, little changes to the equation make big numbers evaporate really fast. $10 billion isn’t that much when you are talking about 1.3 million employees. As for Wal-Mart being a more socially responsible employer, I think they should experiment with the idea. The shareholders might not be happy, but with nearly $100 billion in assets, the Walton family isn’t going to be homeless if a flirtation with social responsibility should not turn out to be a cash cow.

I was looking at the Wal-Mart website this evening and their annual report.

http://www.walmartstores.com/Files/2005AnnualReport.pdf

According to the annual report, Wal-Mart plans to open another 530 new stores of various types in the coming year. When I think about that, I am reminded of that scene in the Stallone movie “Demolition Man” where someone tells him, “All restaurants are Taco Bell.”

I liked both posts; I think both sides have legitimate perspectives. Walmart can’t pay its workers like they’re working at Home Depot, and at the same time, it shouldn’t completely shirk its responsibility to do what it can.

In another direction Howard, I know for a fact there are people who think Walmart should pay its workers and provide full benefits at the same time. Whether or not those are the reasonable people, that’s debatable, but they exist. Heck, I’d be happy if they just gave it the old college try.

[…] , I don’t necessarily believe that all workers are better off in unions. I hinted in a recent comment that some companies do such an […]