Wal-mart absorbs increased wages, no price increases

[BehindBlueI's]

Yes, your post kind of explained it. But the liberals don't read the post, they read the thread title and imagine money appearing in poor peoples' pockets.

Ah, so "liberal" people are too stupid to read the post and just read the title, and also too stupid to know what "absorbed" means. Again, weird.

There is, of course, the possibility that these increased wages will cause them to go under. You're absolutely right. Since this is Walmart, and since the government isn't forcing them to raise those wages, I don't predict that happening. They still have options that will keep them in business.

I get what you're trying to do. You support higher minimum wages. The economic conservatives of us say "No way, that will cause prices to go up or businesses to go under." You see this as an opportunity. "Look at Walmart! They raised wages and nothing bad happened! The losses are all just "absorbed"!

Someone is going to absorb those losses. Who will it be? The consumer, in the form of higher prices? The employees, in the form of lost jobs? The shareholders, in the form of smaller returns on their portfolio? The suppliers? Why do you get to pick who wins and who loses? Is the 70 year old guy, trying to live off of his retirement returns less important than the kid working at Walmart?

Unless, of course, the free market dictated those wage increases. If it did, then great. More wealth is being created and the employees rightly get some of it. Free market at work.

That's actually why I posted it. Because INGO Economists continue to present that binary argument. If you raise wages, it is unsustainable. If you raise wages you have to raise prices. If you get rid of illegals, food prices will skyrocket. Etc. Etc. Always with the scare tactic that if wages go up, YOU, dear reader, lose. You continue to ignore that the economy expands and that a stronger middle class runs that expansion, that wages in the hands of lower income earners reenter the economy immediately, and that money that is moving is doing the work of the economy while money that sits might as well not exist as far as economic growth is concerned. Money is not spent once and destroyed. It circulates.

You continually ignore price elasticity. Yet your arguments are self contradictory. A corporation's goal is profit. So if Wal-mart could simply raise prices to increase earnings 24 cents per share, then they would have done it and increased their margins. Their earnings predictions would have been $5.24. They didn't just hit $5 and decide that was good enough, we'll only increase prices again to maintain $5 a share. So if they can simply raise prices to counteract wage increases, why didn't they simply raise prices to increase margins? Right.

Our GDP has increased about $10 TRILLION since 1980. What share of that went to workers? What share went to the top 5%? Who "loses" when the entire economy expands and the distribution remains relatively constant?

Which brings us to picking winners and losers? Talk about propaganda. Someone ALWAYS picks winners and losers. If you think we all have equal pull in this economy and that there are not people with outsized influence thanks to outsized dollars, well, that's a remarkable ability to ignore reality. This is another of the fallacies you enjoy. That the "free market" is simply a lack of government regulation. A "free market" requires no barriers to entry or exit, free flow of goods/labor, equal power in negotiation among all parties, etc. There are always barriers, and they can either hurt or help either party. North Dakota wages are high simply because there is no free market of labor, there are barriers to mobility including lack of available housing, inability to travel for economic or social reasons, etc. In a truly "free market" wages would stabilize. People would flow to ND to work until the wages there were the same as everywhere else. That doesn't happen, of course. So I'd like to hear your plan for a "freer market" and how that looks with the disparity in the bargaining power of an individual worker vs a multi-billion dollar corporation and who picks the winner and loser in that equation.

 

[Vamptepes]

On a side note when I still worked for walmart the $5 pillows cost them 25 cents to make. And the claims people in charge of keeping the books on broke. And stolen items are a bunch of liars and thieves themselves. As a former manager I hated the company and the amount to money they bled out to get kickbacks. The Mrs is a manager their currently and it's the same crap. The typical instead of marking it down throw it away because you wind up with more money-back is ridiculous. And not to mention. The cashiers who just got caught at 3781 stealing over 50k in 3 months not including fake receipts for electronics.

 

[steveh_131]

Ah, so "liberal" people are too stupid to read the post and just read the title, and also too stupid to know what "absorbed" means. Again, weird.

90% of the population is too stupid to read the post and understand the terminology, liberals just happen to be the most of the segment that will latch onto the wealth-redistribution ideas like forced minimum wages.

That's actually why I posted it. Because INGO Economists continue to present that binary argument. If you raise wages, it is unsustainable. If you raise wages you have to raise prices.

No, that's not the argument at all. Wages can be raised and are raised all the time and it can be perfectly sustainable - but the market must dictate those wage raises. If the government dictates it then yes, it is unsustainable.

I feel like you and I are disconnected on this. Wage increases are a part of economic growth. They fluctuate with supply and demand of labor as well as other factors. I've not seen anyone on INGO deny that a company can raise wages as part of a plan to increase profits, when the market allows.

You continue to ignore that the economy expands and that a stronger middle class runs that expansion, that wages in the hands of lower income earners reenter the economy immediately, and that money that is moving is doing the work of the economy while money that sits might as well not exist as far as economic growth is concerned. Money is not spent once and destroyed. It circulates.

Whose money is 'sitting'? You think Walmart keeps its profits under a mattress somewhere? Of course it doesn't.

Where does this wealth-distribution scheme end? How much money should we let the wealthy people keep, and how much should we give to the poor in order to keep that money 'moving'?

You continually ignore price elasticity. Yet your arguments are self contradictory. A corporation's goal is profit. So if Wal-mart could simply raise prices to increase earnings 24 cents per share, then they would have done it and increased their margins. Their earnings predictions would have been $5.24. They didn't just hit $5 and decide that was good enough, we'll only increase prices again to maintain $5 a share. So if they can simply raise prices to counteract wage increases, why didn't they simply raise prices to increase margins?

Again, this is the key difference between a market-encouraged wage increase and a government-mandated one. I do understand price elasticity. Walmart can only raise prices so much without losing sales to the competition.

But this is key, so please follow what I'm saying: If the government mandates the wage increase, and every competitor is also seeing higher operating costs, they will all raise their prices accordingly. This happens every time overhead increases, whether it's gas prices or anything.

 

[BehindBlueI's]

I do understand price elasticity.....But this is key, so please follow what I'm saying: If the government mandates the wage increase, and every competitor is also seeing higher operating costs, they will all raise their prices accordingly. This happens every time overhead increases, whether it's gas prices or anything.

Again, you show you don't. You're playing both sides of the fence now. Wal-mart can only raise prices so much...yet they will raise prices every time overhead increases. Also interesting you keep trying to make this a minimum wage or gov't mandated debate when you're the only one who brought that into play. I've simply pointed out Wal-mart was all scary price increases 2 years ago and has done a complete turn around now. You want to make it about minimum wage.

Do you have facts to back up your "everytime government mandates a wage increase...they all raise prices?"

 

[steveh_131]

As for barriers, you show me a barrier to entry that is preventing appropriate competition and I'll show you the government regulation that makes it possible.

 

[steveh_131]

Again, you show you don't. You're playing both sides of the fence now. Wal-mart can only raise prices so much...yet they will raise prices every time overhead increases. Also interesting you keep trying to make this a minimum wage or gov't mandated debate when you're the only one who brought that into play. I've simply pointed out Wal-mart was all scary price increases 2 years ago and has done a complete turn around now. You want to make it about minimum wage.

Do you have facts to back up your "everytime government mandates a wage increase...they all raise prices?"

As long as that overhead is common across the industry, yes.

Ever notice a gas station that doesn't raise prices every time something bad happens at an oil refinery? Neither have i.

 

[ruger1800]

Good for walmart, watch that box of whatever go from 16oz to 12oz with no price change,or have you noticed already.

 

[BehindBlueI's]

As long as that overhead is common across the industry, yes.

Ever notice a gas station that doesn't raise prices every time something bad happens at an oil refinery? Neither have i.

I'll let you pick up an economics book and figure out the difference between a labor market and a commodities market.

I'll still wait for facts to back up every time government mandates a wage increase they all raise prices. Historical economic data is freely available online. It should be an easy task.

 

[ruger1800]

Every time we have a wage increase at work, the company raises the insurance rate.

 

[steveh_131]

I'll let you pick up an economics book and figure out the difference between a labor market and a commodities market.

I'll still wait for facts to back up every time government mandates a wage increase they all raise prices. Historical economic data is freely available online. It should be an easy task.

Well the correlation is obvious, BBI. Prices have been rising alongside minimum wage forever. Can't prove causation that way.

Let me flip this argument on you. If companies have all these costs they can "absorb", why don't they lower their prices and destroy the competition?

 

[ruger1800]

Walmarts a monopoly they have no competition.

 

[GodFearinGunTotin]

If government mandates are the panacea that so many claim, we really should amend the Constitution to allow it...if we really wish to maintain any semblance of a constitutional republic.

 

[steveh_131]

Walmart has plenty of competition.

 

[BehindBlueI's]

Well the correlation is obvious, BBI. Prices have been rising alongside minimum wage forever. Can't prove causation that way.

Let me flip this argument on you. If companies have all these costs they can "absorb", why don't they lower their prices and destroy the competition?

Put your theory of correlation to the test and put an inflation adjusted chart of minimum wage and the 22 times it has been increased and a CPI chart on top of each other and see if they track or move in proportion to each other. Hint: They don't. Next?

Your second part is pretty simple. They often do. How do you think Walmart got to be as big as they are? Have you noticed how Amazon reacts when a potential rival starts up? What do you think an "anti-dumping duty" protects against?

 

[BehindBlueI's]

Walmarts a monopoly they have no competition.

How so?

Would you not consider big box retail an oligopoly?

 

[ruger1800]

Walmart has plenty of competition.

None that can buy in such quantities, that they can get the same discounts as walmart

 

[steveh_131]

Put your theory of correlation to the test and put an inflation adjusted chart of minimum wage and the 22 times it has been increased and a CPI chart on top of each other and see if they track or move in proportion to each other. Hint: They don't. Next?

First of all, that's not my theory. You suggested it as a method, but there are too many variables to really prove this statistically, that's why I specifically pointed out that it is no way to prove causation.

My theory is based purely on the principles of economics. The employees are being paid more. From whose pocket are you taking this money so that you can put in the pockets of the employees, who deserve it more in your mind? That money is coming from somewhere. Who are you choosing to take it from when you support higher forced wages?

I think it's a combination. Some comes from the consumer, some comes from Grandpa's retirement in the form of decreased share values, some comes from the suppliers. Everybody down the line gets ****** over just a little bit so that the liberals can feel better about themselves.

 

[BehindBlueI's]

First of all, that's not my theory. You suggested it as a method, but there are too many variables to really prove this statistically, that's why I specifically pointed out that it is no way to prove causation.

My theory is based purely on the principles of economics. The employees are being paid more. From whose pocket are you taking this money so that you can put in the pockets of the employees, who deserve it more in your mind? That money is coming from somewhere. Who are you choosing to take it from when you support higher forced wages?

I think it's a combination. Some comes from the consumer, some comes from Grandpa's retirement in the form of decreased share values, some comes from the suppliers. Everybody down the line gets ****** over just a little bit so that the liberals can feel better about themselves.

Asked and answered. Read #41. When the whole pie grows, people can get a bigger slice without making your slice smaller.

What principles of economics are you basing your theory on?

 

[steveh_131]

Asked and answered. Read #41. When the whole pie grows, people can get a bigger slice without making your slice smaller.

What makes you think that forcefully redistributing wealth to the lower class causes the pie to grow?

And, once again, why stop at minimum wage? How rich should we let people get before we take their money and give it to someone else, in the name of economic growth?

And also once again, do you think that the upper class hides their money under a mattress?

 

[BehindBlueI's]

What makes you think that forcefully redistributing wealth to the lower class causes the pie to grow?

And, once again, why stop at minimum wage? How rich should we let people get before we take their money and give it to someone else, in the name of economic growth?

And also once again, do you think that the upper class hides their money under a mattress?

Isn't it interesting instead of simply answering what principals of economics you are basing your theory on, providing any facts to back up your claims, or countering a single argument I've made in response to your tripe that you now go further and further afield to avoid it? You can get your own answers with a little research about cash reserves, savings rates and the impact on an economy, percentage of income spent by various income brackets, etc. Present some facts and we can debate it. Simply declaring things is now tiresome.

I'm tired of arguing algebra with someone who doesn't yet understand addition. When you want to back up anything you've said with real facts or real theories and stop just trying to dazzle with BS and range further and further afield from the points actually made, come on back.