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Wal-Mart, Target, Kohl’s and what constitutes a living wage

Besides the mayhem at some Wal-Mart stores on Black Friday, there was also a bit of drama surrounding strikes and protests in Wal-Mart parking lots over how much (or little) that company pays its store employees.
I think it's worth our taking a look at the question of what constitutes a living wage in 21st century America and whether retailers are paying adequate salaries. Why, because all of us in consumer products are dependent upon these frontline employees for our livelihoods. Without them, nothing gets to the floor and if nothing gets to the floor nothing is sold. And if we really want to be self-serving, we may want to consider whether retail employees are making enough money to go out and purchase the products we make?
In order to get a better grasp of the situation, I turned to an interesting piece by Jordan Weissmann in this month's Atlantic entitled" Who's Really to Blame for the Wal-Mart Strikes? The American Consumer." It's an extensive article but what I found of particular interest was that Wal-Mart is not the lowest paying retailer. Here is how the retailers, according to market research company, Ibis World, stack up in terms of the full time employee hourly wage paid (lowest to highest):
Retailer Hourly Wage
Kohl's $8.02
Target $8.13
Wal-Mart $8.81
Bed Bath and Beyond $9.55
Best Buy $9.67
Sam's Club $10.30
Lowes $11.16
Home Depot $11.77
This list raises a number of thoughts and questions:
- Who knew that Kohl's and Target paid less than Wal-Mart? In fact, Kohl's pays 9% less than Wal-Mart.
- Why does there not seem to be a connection between what a company pays and how
- successful it is? After all, Home Depot and Lowes are highly successful chains not to mention Costco which is purported to be the highest paying retailer.
- Why does Wal-Mart pay its Wal-Mart employees 15% less than its Sam's workers?
- According to these figures, Kohl's pays its employees 32% less than Home Depot? Why is that the case? Are they less efficient, care less, more profitable, use lower quality workers or is there some other reason?
- What about ecommerce providers like supermarket company Fresh Direct or Amazon? How much do their lowest paid workers make?
In case you're wondering what would happen if retailers increased these wages, Weissmann states that "A study from UC-Berkeley's Center for Labor Research and Education suggested it would cost the average shopper an extra $12.49 a year if Wal-Mart paid its workers a full $12 an hour and passed most of the cost to consumers. That works out to about $0.46 per trip to the store."
Being a retail worker in America is a tough job with low pay and long hours that many times include working on holidays. Should Wal-Mart, Kohl's and Target lead the way by increasing salaries? What do you think?
Randhil commented:
Please keep trhoiwng these posts up they help tons.
Con commented:
Yeah, well don't buy a cell phone there. I received one as a Christmas prsneet and in less than 4 months it started to act up. They refused to exchange, replace or even send it away to Samsung to get it repaired. I'll never set foot in the Belleville Wal-Mart again!!!!!
Kyle commented:
The problem that people forget is that workers are paid according to what the market sets their price at. Being a retail worker is not exactly the most high-skilled job, and as such, it is not going to pay much.
I am all for safety nets for when people need help, but people seem to think they are entitled to an income that lets them support a family or something. That's not how the economic system works. If you want money, you have to have something to trade, whether it be a skillset, product, or service, that the market prices highly enough.
No one forces anyone to have a family on a Wal-Mart income. There are lots of different forms of birth control, there are condoms, and legalized abortion. People need to take more responsibility for themselves. And the term "living wage" is a rather arbitrary term.
Those arguing for unions, well unions had their place before labor laws existed, but those days are long gone. Technically a union is a legalized worker cartel. It allows workers to artificially drive up the price of their labor to businesses. This has the affect of driving up the unemployment rate, prices, and so forth in the economy. The only reason unions lasted as long as they did throughout the 20th century was due to the lack of competition, and especially after World War II, when almost all the major industrialized nations of the world had been bombed out.
Today, the legacy costs of unions have hurt a lot of companies and almost destroyed GM and Chrysler. With global competition now, unionized businesses are not as competitive, hence the decline in private-sector unions. In the government, which has a monopoly, unionization (public-sector unions) has been growing.
Unions are fine, and still necessary in certain industries, to protect workers against unscrupulous businesses in terms of issues like worker safety. But in terms of pay, their acting as cartels is morally wrong.
Mike commented:
To rephrase - "Being a MANUFACTURING worker in CHINA is a tough job with low pay and long hours that many times include working on holidays."
Oh, wait a minute that is okay since it is about the profits of the toy companies not just the big bad retailers.
Anna commented:
Of course these retailers should lead the way by increasing salaries to a living wage, especially if it can be done for only $12.49/shopper/year. It will also decrease the need for these workers to be on food stamps and medicaid as a supplement to their meager salaries because they are paid so little. Many people love to rail against the '47%', as if they are all unemployed, rather than the working poor. I urge these employers to take the initiative and pay their workers a living wage including full-time hours; the public is demanding it and the protests won't stop until the right thing is done. The rewards they will reap are happy, healthy, more productive workers. What's not to like about that?
Indepent Business Supporter commented:
I don't think anyone can argue that large retailers are hardly paying a living wage for anyone supporting a family…the difference with Wal-Mart is that they have a vast amount of "Perma-Temps" workers (especially those working at the ports where merchandise is imported) so they are not required to pay healthcare and additional benefits. This should be taken into consideration when discussing wage…it's not only limited to the actual hour figure.






















