Quote:
Originally Posted by Minte
In theory giving the Walmart employees an extra bump will make them happy...for about 3 weeks. Raises and bonuses don't have much of a long term effect. People that are prone to living week to week quickly find something new to waste that raise on and in a very short time it's business as usual. Push it to far, the company has no alternative but to raise prices.
Don't forget about those shareholders. That's the key part of this situation. 401k's are built on dividends. Growth in every facet of the economy depends of keeping those shareholders enthusiastic.
My own opinion is Walmart and McDonalds should raise their prices. However, if they do that a lot of customers will be unhappy. McDonalds isn't like Exxon. People don't require cheeseburgers and fries. And look at how much we all love Exxon & BP..
edit:check your math on that 20%. If Walmart eliminated all of the owners bonuses it wouldn't add up to anywhere near a 20% pay increase for the employee base. The only way for that to happen is to raise consumer prices.
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actually not true but its fun to keep with the same false belief.
http://hbr.org/2006/12/the-high-cost-of-low-wages/ar/1
"Costco?s practices are clearly more expensive, but they have an offsetting cost-containment effect: Turnover is unusually low, at 17% overall and just 6% after one year?s employment. In contrast, turnover at Wal-Mart is 44% a year, close to the industry average. In skilled and semi-skilled jobs, the fully loaded cost of replacing a worker who leaves (excluding lost productivity) is typically 1.5 to 2.5 times the worker?s annual salary. To be conservative, let?s assume that the total cost of replacing an hourly employee at Costco or Sam?s Club is only 60% of his or her annual salary. If a Costco employee quits, the cost of replacing him or her is therefore $21,216. If a Sam?s Club employee leaves, the cost is $12,617. At first glance, it may seem that the low-wage approach at Sam?s Club would result in lower turnover costs. But if its turnover rate is the same as Wal-Mart?s, Sam?s Club loses more than twice as many people as Costco does: 44% versus 17%. By this calculation, the total annual cost to Costco of employee churn is $244 million, whereas the total annual cost to Sam?s Club is $612 million. That?s $5,274 per Sam?s Club employee, versus $3,628 per Costco employee."