Economics 102: WalMart Cuts Worker Hours After Hiking Minimum Wages

9 comments

Posted on 31st August 2015 by Administrator in Economy |Politics |Social Issues

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Tyler Durden's picture

This year, some American executives who heeded loud calls for across-the-board wage hikes for America’s lowest-paid workers received a complimentary refresher course in undergad economics courtesy of the free market.

Take Dan Price for instance, the 31-year old CEO of Seattle-based Gravity Payments Systems who found out the hard way that setting the pay floor at $70K comes with all manner of unintended consequences.

And then there’s Wal-Mart.

Earlier this year, the retail behemoth became one of several corporate heavyweights to raise wages for its meagerly compensated workers, around 500,000 of which are now set to receive at least $9/hour and $10/hour by Q1 2016. The move will cost somewhere around $1 billion this year. 

Now one thing that should have been abundantly clear from the start is that if ever there were an employer that could ill-afford a $1 billion across-the-board pay raise without immediately making up the difference by either firing some employees, cutting hours, or squeezing the supply chain it’s Wal-Mart. After all, they’re the “low price leader”, and you don’t hold on to that title by passing labor costs on to customers.

Predictably, the company moved to extract more “value” from its suppliers and when that didn’t prove sufficient, the folks in Bentonville brought in the “plumbers.”

But the story didn’t stop there. Late last month we highlighted an internal memo circulated at Arkansas recruiting firm Cameron Smith & Associates which looked to be an attempt to prepare the firm’s employees for layoffs at Wal-Mart’s home office. Then, not a week later, Bloomberg ran a story detailing the grievances of some senior Wal-Mart employees who suddenly realized that although they may still be making more than their subordinates, the wage hierarchy had been distorted and that distortion had nothing to do with merit. As we put it, “higher paid employees don’t understand why everyone under them in the corporate structure suddenly makes more money and if people who are higher up on the corporate ladder don’t receive raises that keep the hierarchy proportional they may simply quit which means that, for Wal-Mart, raising the minimum for the lowest paid workers to just $9/hour will end up costing the company around $1.5 billion if you include the additional raises the company will have to give to higher paid employees in order to retain their ‘talents’and avoid a mid-level management mutiny.”

Well, don’t look now, but undergrad economics is rearing its ugly again at Wal-Mart as the retailer cuts workers’ hours in a desperate attempt to offset wage hikes. Here’s Bloomberg with more:

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WAL-MART FREAKS OF THE WEEK

7 comments

Posted on 29th August 2015 by Administrator in Economy |Politics |Social Issues

872

Looks like a crocodile saw you wearing those shoes, got pissed off and attacked you from behind.

869

If Kentucky plans on changing their state flag anytime soon can I request this picture?

868

What is going on here? You look like a teenage girl on a beach vacation that somehow turned into the owner of the store where she bought all that nostalgic vacation garbage that falls apart after 4 days.

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STEALING FROM WAL-MART & TARGET IS OK ACCORDING TO UNIVERSITY OF WISCONSIN EXECUTIVE/PASTOR/ACTIVIST

20 comments

Posted on 25th August 2015 by Administrator in Economy |Politics |Social Issues

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Hat tip Starfcker

This is what black liberal academic socialist nutjobs actually believe. This brainless twit doesn’t know what he is talking about. His knowledge of the real world is less than zero. Retailers DO NOT have insurance to cover losses from shoplifting. The losses go directly to the bottom line.

“I just don’t think they should be prosecuting cases for people who steal from Wal-Mart. I don’t think that. I don’t think that Target, and all them other places – the big boxes that have insurance – they should be using the people that steal from there as justification to start engaging in aggressive police behavior.” – Everett Mitchell

WAL-MART FREAKS OF THE WEEK

2 comments

Posted on 22nd August 2015 by Administrator in Economy |Politics |Social Issues

853

Well if this isn’t an editorial cartoon played out in real life. So is that dude just lazy or is Walmart that bad to work for? True art makes you question things….So I hear. I still think movie posters are decoration, so what the hell do I know?

851

It’s like you forget they don’t know they’re doing it. I mean, come on. If my socks aren’t covering enough ankle I know it, you can be damn sure if my ass cheeks were hanging out that I’m well aware of the situation.

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HUGE DEAD CANARY IN THE COAL MINE

5 comments

Posted on 18th August 2015 by Administrator in Economy |Politics |Social Issues

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Do you need any more proof about the global recession we are currently experiencing, despite the propaganda spewed by the MSM, politicians, central bankers, and Wall Street hucksters?

Wal-Mart has annual sales of just under $500 BILLION.

There are only 26 countries in the world with a higher GDP than Wal-Mart’s sales.

They are worldwide. Their results are tanking. They cater to the middle and lower classes. Only the .1% are experiencing a boom. The willfully ignorant masses are experiencing an ongoing recession.

Walmart Stock Slides After EPS Miss, Profits Tumble, Full Year Guidance Slashed

Tyler Durden's picture

It may not rely on such tech bubble (ver 1.0 and 2.0) buzzwords as eyeballs, clicks, “story”, “sharing”, “hyperxxxx, “non-GAAP” and so on, in fact with 2.2 million worldwide employees Wal-Mart is as old-school as it gets, which is why the fact that what was once the world’s most valuable retailer (until Amazon dethroned it a month ago) just reported not only a miss, on tumbling operating earnings, but slashed its guidance by 7%, should be very troubling to anyone who still looks as such trivial things as “fundamentals” and how these reflect the even more trivial “economy.”

This is what happened:

  • Despite reporting revenue of $120.2 billion, or virtually unchanged from a year ago, and above the $119.7 billion expected, WMT reported EPS of $1.08, below the exp. $1.12. WMT promptly blamed exchange rates as the culprit for the $0.04 miss. Needless to say, when the dollar is weak no company ever says “EPS beat by $X.XX because of a favorable exchange rate.”
  • The first problem emerged when looking at operating income, which dropped by -10.0% consolidated, and tumbled by a whopping -14.2% in the firm’s international stores.
  • What was even more problematic is that while Wal-Mart reported a 4.8% increase in Net Sales in the US, rising to $74 billion, domestic Operating Income also tumbled by 8.2% to $4.8 suggesting there is a significant margin compression going on.  Expect mass layoffs next as the company realizes that boosting minimum wages always has a profit trade off.
  • Then there was the most important factor: free cash flow. “Free cash flow was $5.1 billion for the six months ended July 31, 2015, compared to $6.8 billion in the prior year. The decrease in free cash flow was due to lower income from continuing operations and the timing of payments.
  • But the worst news for WMT shareholders, and the reason why the stock is down 3% pre-market is because the company slashed its guidance as follows: Walmart updated full year EPS guidance to a range of $4.40 to $4.70, from a previous range of $4.70 to $5.05. This range includes Q3 EPS guidance of $0.93 to $1.05.

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WAL-MART FREAKS OF THE WEEK

5 comments

Posted on 15th August 2015 by Administrator in Economy |Politics |Social Issues

828

Better watch yourself lady, you turn your back for a few minutes and that bird is gonna end up deep fried and put on special for $3.99.

827

It’s like a totem pole of shame.

830

Sorry to break the news to you pal, but when you wake up you’ll still be in your nightmare that is Walmart.

824

I hope you recognize this pic of you and start using it as your online dating profile pic because I think it sums you up as a person beautifully.

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WAL-MART FREAKS OF THE WEEK

4 comments

Posted on 8th August 2015 by Administrator in Economy |Politics |Social Issues

Yes. Someone shit their pants. 

808

I’d like to put a stipulation on Furries in public. If you’re going to dress like a cartoon character, then you should have to entertain me and act like one. All I’m saying is that pianos should be falling all over the place.

807

Looks like this fashion statement has a bit of a stutter and stammer to it. Also it appears to be in an accent nobody can understand.

809

Honestly, I’m pretty much at a lost for words. The best part of being freaky behind closed doors is that we, the public, can’t see through those doors. Remember that.

810

Clearly this is the little piggy that went to market. Not so little now. Walmart will do that to ya bud.

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ANOTHER REASON I DESPISE BANKS

31 comments

Posted on 3rd August 2015 by Administrator in Economy |Politics |Social Issues

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Yesterday was a day from hell. A 14 hour ordeal moving my son into his apartment at Penn State Altoona. It included 8 hours of driving, rest stop food and the consequences thereof, battling the hoards of freaks at Wal-Mart, and the latest reason I despise banks.

I had Jimmy drive the entire trip so he could get used to the roads and the tedious boredom of driving on the PA Turnpike. Avalon followed with my youngest son in the car behind. It gave me plenty of time to impart my years of wisdom upon him. I’m sure he has already forgotten everything I said. And I had to listen to four hours of Phish.

All went smoothly and it was time to make a rest stop at the 2 hour mark just before Blue Mountain. The plan was to grab a quick bite to eat and complete the journey for a 1:00 pm arrival. The selection was limited. Either a personal pan pizza from Pizza Hut or something from Roy Rogers. I grabbed a box of pizza and they got Roy Rogers.

Within 30 minutes of departure there was a rumble in my tummy. The rumble became shooting pains. I guess you can screw up a pizza. For the last 90 minutes of the trip I was in various stages of discomfort. But, I gutted it out. When we arrived and got the key, I grabbed the case of toilet paper we brought and ran for the bathroom. And Jimmy’s new apartment was christened.

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WAL-MART FREAKS OF THE WEEK

2 comments

Posted on 1st August 2015 by Administrator in Economy |Politics |Social Issues

787

Ahhh yes, the forgotten Orange Mario Brother. He’s not quite a good guy like Mario & Luigi and he’s not quite a bad guy like Wario & Waluigi. So basically he just kinda chills all day in his parents house as they berate him for not being more like his brothers.

788

At first I was like “Can I really trust this guy sitting outside Walmart to give a thorough breast exam?” But then I noticed he used BYOB to mean ‘Bring Your Own Boobs’ and anybody that fun and creative has to be legit. That’s just good marketing right there.

790

Ohhh this is always fun. Will Dad realize his kid is about to pass out in time or will we all get to give him glaring looks of shame and disappointment as medics bring her back to consciousness?!?! Stay tuned to find out.

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WAL-MART FREAKS OF THE WEEK

9 comments

Posted on 25th July 2015 by Administrator in Economy |Politics |Social Issues

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Silver lining – you sweep the floor as you walk so you save tons of money on cleaning supplies!

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Perhaps next time you can provide everyone with goggles…I request mine to be blacked out so I can’t see a thing.

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Looks like you need to increase the size of those black censorship bars

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WAL-MART FREAKS OF THE WEEK

9 comments

Posted on 18th July 2015 by Administrator in Economy |Politics |Social Issues


You’re time has passed old friend. Trying to fit in with the younger crowd makes you stand out like a sore thumbs up emoji.


Somebody let the dough on those bottom biscuits rise too long…


C’mon guys. You’re both missing the point of suspenders. They are meant to hold your pants up, not make it look like your ass crack is bungee jumping.

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WAL-MART FREAKS OF THE WEEK

3 comments

Posted on 11th July 2015 by Administrator in Economy |Politics |Social Issues

733

Well as long as your “girlfriend” said it’s okay I suppose we should all just pop a titty out for you. Then again who would have bet on a blow-up doll telling him he can’t see real boobs?

734

Okay, I mean we all appreciate the extra care and attention you’re giving to not have us see your butt-crack, but even Lebron James would be jelly of the magnitude of this triple-double.

731

Ok bud, settle down. No need to make such a visual statement on your married life. We get it….we all get it.

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