Walmart earns $13k of profit across each of their 2m employees. One could make the argument that if Walmart had to pay each employee an extra (say) $3k annually [1], management would instead choose to shut the whole thing down and return capital to the shareholders, which would be a choice available to them. But I don't find that argument compelling in the slightest, and Walmart does not have any compelling IP that would preclude letting management shut it down and have the likes of Target/Kroger fill the gap in the market.
1 - an additional $3k annually would be transformative to the life of the average Walmart employee.
Your numbers are off. Walmart's pretax income was ~$19B, so that's ~$8k profit per employee.
>One could make the argument that if Walmart had to pay each employee an extra (say) $3k annually
If they were pressured to increase wages, they would adjust their business model to employ fewer, "more productive" employees (e.g. invest more in automation). The government would still have to subsidize the cost of living of those who would have otherwise been unemployed.
3,000 / 1,936 = $1.55 more pay per hour. Nothing to sneeze at when you make minimum wage (which they don’t all make), but hardly “transformative” imo.
Honest question: why not make it $5k or $10k?
Is there something magic about $3k that leaves Walmart employees unaffected, and — if so — why will $5k not achieve this?
> The problem that housing and healthcare costs are too high
Why can't these both be problems? Low skill labor could be exploited to pad corporate bottom lines and housing and healthcare costs could be unreasonably high due to governmental policy. These two things can both be true.
This is a pretty extreme claim to make without evidence.
Or Walmart could pay them a living wage directly, and just lower it's profits a little. That's how it works in every other developed country on the planet. Even Australia with it's $21.38 minimum wage and healthcare for all has only 3.5% unemployment [1]
[1] https://tradingeconomics.com/australia/unemployment-rate
I agree that the US can increase its minimum wage without significantly increasing unemployment, but it can't do so nearly as much as Australia. For one, Australia has a lower minimum wage for youth. More importantly, Australia has vast mineral resources that are in high demand, so that creates a higher demand for lower-income labor.
How do you think they amassed that fortune?
(Hint - they did it by paying their employees an extremely low wage.)
Walmart gross profit for the twelve months ending October 31, 2022 was $146.292B, a 2.14% increase year-over-year.
Walmart annual gross profit for 2022 was $143.754B, a 3.54% increase from 2021.
Walmart annual gross profit for 2021 was $138.836B, a 7.33% increase from 2020.
Walmart annual gross profit for 2020 was $129.359B, a 0.2% increase from 2019.
Net income is about 9 Billion [2]. If the company were nationalized and turned into a worker cooperative, it could increase the pay for each of 2.3 million workers about 3.9k/year before it starts going out of business.
https://www.investopedia.com/ask/answers/101314/what-are-dif...
https://www.macrotrends.net/stocks/charts/WMT/walmart/net-in...
Ah, no, because Net Income is showing how much money is left after the Walton's pay themselves billions of dollars.
The company is making more than $100 billion in profit every year, and increasing every year.
That's a massive false dichotomy. There are options are vastly more options beyond "Walmart employs these people" and "Walmart doesn't employe these people". For example, Walmart could just... pay them more.
> Even if you could magically squeeze higher wages from Walmart profits without destroying the economy, most of these wages would go towards these government-protected rent seekers.
Walmart pays out billions in dividends every year and makes billions in profit. Asking that their business actually be sustainable and not rely on employee exploitation shouldn't be some bold proposal and if Walmart is incapable of existing without relying on its employees being on government assistance, then maybe Walmart shouldn't exist at all.
Essentially it's that if Walmart didn't employ they poor, they'd become a burden on the state. Which is the same argument used to defend the exploitation of workers in banana republics.
They go on to say that the government is the cause of high rents, by pointing to San Francisco which has the highest rent in the nation. An argument which is trivially dismantled when we look at rural areas like the ones in my state where housing costs are increasing so quickly that people are having to move away. Which is due to real estate speculation:
https://www.pewtrusts.org/en/research-and-analysis/blogs/sta...
When we fit a curve to the data, we see that we're in the middle of a class war between the owner class and the worker class. Owners want to own even more so that they can quit working and have workers support them. Workers are so beat down and disenfranchised by 40 years of trickle-down economics that they're too divided to organize or even vote for candidates that would actually fix the problem. So they vote in fear to keep things the way they are. It's so tragic to think about that most people don't.
Until we examine these root fallacies from first principles, we're stuck. Just how the owner class likes it.
This is a completely bad-faith interpretation of my comment. The OP and I were both talking about the cost of government services. If you want to frame that as a burden, that's on you. Banana republics didn't provide their citizens with trillions of dollars of government services.
> An argument which is trivially dismantled when we look at rural areas like the ones in my state where housing costs are increasing so quickly that people are having to move away
I guessed what state you lived in before I looked at your profile. Check where all the recent immigrants are coming from. NIMBYism in California is so bad that its effects spilled over to the entire west coast.
I'm concerned though that so often the government is blamed for problems started by the private sector. I might go so far to say that regulatory capture is the issue. Maybe unintended consequences are at play.
But in my state, a certain potato and beef producing corporation irreparably damaged the high desert through unregulated grazing. Old growth forests were clearcut a century ago. Rivers and lakes are polluted with chemicals and heavy metals from mine tailings. We needed regulation constantly, but never got it until it was too late.
So what feels counterculture in California, stuff like conservatism and the demand for smaller government, has had devastating consequences for red states like mine. I'm the minority here. I've been disenfranchised my entire life. We rely on you all to vote for the environmental protections that we have been gerrymandered out of voting for ourselves due to decades of entrenched one-party control.
Also after sleeping on it, I realized that my "root fallacies" comment was a bit heavy-handed. I have my own blind spots from being radicalized by the constant division sewn by amoral politicians who got their playbook from guys like Newt Gingrich. But I've known that provincial glorification of half-truths wielded for political gain my entire life. What I was trying to say there is that we need a common context based in truth or we'll never be able to communicate civilly and settle our disputes. Which I believe is what you were getting at with your comment here.
This is a completely ridiculous assertion because if Walmart didn't employ these people, then taxpayers then they would be required to be subsidized by the taxpayer even more. Focusing on wages is missing the point. The problem isn't that people aren't being paid enough because America has the richest residents in the world, excluding tax-haven countries. The problem that housing and healthcare costs are too high, both of which are controlled by a policymakers that refuse to understand how incentives work. Even if you could magically squeeze higher wages from Walmart profits without destroying the economy, most of these wages would go towards these government-protected rent seekers. See housing in the Bay Area as the most obvious example of this.