Saturday, November 24, 2012

Basic Wal-Mart Math

With all the talk about Wal-Mart and its poor pay scale and refusal to give people sufficient hours to make a living, I thought it might be interesting to take a peek into what raising those salaries for the stockers, the check out people, the docents and all the others Wal-Mart workers would cost and mean to the company. So here is a rough idea. I'm sure someone will have more precise figures for me, and if you do, please let me have them so that I can make this more precise.
   Oh, and thank you Occupy Wall Street, for shining a light into a lot of places that have kept themselves shrouded in darkness for a long time. We needed that window opened so that some fresh air could come in and move a little of the dust gathering on all those monied billionaires.
   And no, I don't think most of us are jealous of people who make money. I do think we are irate now that we've learned how much money some people make, particularly in light of how much they pay the people who help them make that money.

Okay, let's do some basic, round-figure Wal-Mart store math.
Walmart end-year profit was roughly $12 billion in its U.S. stores in 2011.
    It employs roughly 1.5 million workers in the U.S.
    If each worker were given a $3 per hour raise--in cash and/or benefits--and we presumed a general, in-the-ballpark figure of 33 hours per week per worker, that would come to roughly $100 per worker per week, or $5000 per year per worker raise.
    1.5 million workers by $5.000 each comes to 7.5 billion dollars.
    Which would leave profits at about $4.5 billion for the Waltons and their share holders.
    Of course, much of that would be turned around and spent in Wal-Mart stores so some of that would then increase Wal-Mart profits.
    And all of it could be written off as expenses, which would possibly save the Waltons and their shareholders some tax money as well.
    Paying their workers the extra $3 an hour would hurt their bottom line, of course. No question about it. But moving that many lower strata workers from $8.50--$11 per hour (after several years) to $11.50--$14.50 per hour (after several years) would be a full step up the socio-economic ladder for those workers and would have a huge ripple effect on local economies where Wal-Marts exist. When local communities have 200-300 people adding $100 bucks each week into the general pot, that is fairly enormous.
    Remember that these are just ballpark figures based on basic research. Remember also that the loss of part of the profit pie does not affect what the upper echelon employees make: Those making $2000-$8000 per hour would not be affected. Per-share profit would decline, and the money taken by the Walton children would decline. Of course, they'd still have their aggregate $100 billion, and they'd still get about half of the $4.5 billion U.S. profit, and they'd still get their share of the $4 + billion made in Wal-Mart stores located outside the U.S. So yes, they'd make less money.
   But they'd still be doing okay. And 1.5 million of their employees and their families would be a lot less desperate to make ends meet.

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