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Why Wal-Mart can NOT afford to pay workers a $15 minimum wage [warning: contains math]
cnbc.com ^ | June 20, 2016 | Michael Saltsman

Posted on 06/20/2016 6:58:31 AM PDT by grundle

Wal-Mart is "hugely profitable," writes the National Employment Law Project (NELP) in a recent commentary, generating "$482 billion in revenue in fiscal year 2016." Here, the writer falsely equates revenue (the money a company takes in before subtracting expenses) and profit (how much a company makes after it pays its costs). It's a common tactic used to shock readers and inflate the perception of a company's finances.

Wal-Mart's actual profit, according to SEC filings, was only 3 percent of its total revenue. That works out to roughly $6,400 dollars in profit for each of the company's 2.3 million employees—a profit that could be wiped out with a $15 minimum wage.

Labor advocates are also fond of appealing to their readers' sense of fairness by arguing that CEO pay at the company proves it can afford a $15 minimum wage. But the math here also doesn't add up. Wal-Mart CEO Doug McMillon earned a combined $19.4 million compensation package in 2015, including salary, stock options, and other perks. That makes for a dramatic sound bite. But if this money was somehow divided between all 2.3 million Wal-Mart associates, each associate would get a one-time $8.43 bonus—that's it.

The fights for $15 have even tried to appeal to conservative hearts by arguing that the higher pay requirement will reduce employees' need for public support programs. It's debatable whether this argument is offered in good faith: California Assemblyman Kevin McCarty (D., Sacramento) recently let slip his mask of concern for the taxpayer when he and his fellow legislators pushed to raise the income thresholds for a public program so that recipients of the state's new $15 minimum wage could still qualify for state benefits. So much for ending welfare as we know it.

(Excerpt) Read more at cnbc.com ...


TOPICS: Miscellaneous
KEYWORDS: minimumwage; unions; walmart
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The reason liberals think Wal-Mart can pay its workers $15 an hour is because they don't understand math. This article uses math to explain why they are wrong.
1 posted on 06/20/2016 6:58:32 AM PDT by grundle
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To: grundle

National Employment Law Project (NELP) is a Soros organization.


2 posted on 06/20/2016 7:03:44 AM PDT by aimhigh (1 John 3:23)
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To: grundle
associate would get a one-time $8.43 bonus

Hey, but that's an annual $8.43, right? You could buy a pack of cigarettes or a six-pack.

3 posted on 06/20/2016 7:04:54 AM PDT by showme_the_Glory ((ILLEGAL: prohibited by law. ALIEN: Owing political allegiance to another country or government))
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To: grundle

There’s kind of a point with these stratospheric CEOs, which are generally not seen in Europe. They might make 10 times the grunt salary, but not 1000 times.

But there aren’t a lot of them either, so the expenditure is not that much in the general scheme of things.


4 posted on 06/20/2016 7:05:34 AM PDT by HiTech RedNeck (Embrace the Lion of Judah and He will roar for you and teach you to roar too. See my page.)
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To: grundle

Liberals also think that big companies such as Wal-Mart don’t pay their “fair share” of income tax and other taxes.

I have worked in the business end of various businesses. I can tell anyone, if they want to listen to facts, that businesses are assessed numerous taxes as the cost of doing business.

There are, to name a few :

income taxes, to both the federal and state governments.
sales taxes
property taxes
unemployment taxes
social security taxes
various excise taxes, depending on the line of business
city or local business license taxes
state business license taxes

And, what liberals don’t address, is that major companies such as Wal-Mart are regularly audited by the IRS and other government entities. Which means that they certainly run their businesses to ensure compliance with all federal, state, and local tax laws. And to ensure that they pay all required taxes.

None of this is enough to suit liberals, I understand. I just wish there were less demagogue preaching from the left when they don’t know what the heck they are talking about.

If leftists had ever run a business, or tried to run a business, I think they would have some different ideas than they preach to the rest of us.


5 posted on 06/20/2016 7:07:00 AM PDT by Dilbert San Diego
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To: grundle

Our local Wal-Mart has a table set up inside offering jobs that start at $12.00 per hour.


6 posted on 06/20/2016 7:07:52 AM PDT by BBB333 (Q: Which is grammatically correct? Joe Biden IS or Joe Biden ARE an idiot?)
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To: grundle

it’s not just the wages, but the social costs of employment (company share of mandated cost per employee plus any company=provided benefits) that make this impractical.


7 posted on 06/20/2016 7:08:16 AM PDT by bigbob
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To: Dilbert San Diego

And as far as being an example of modest living... one of Hillary’s speeches garners enough to pay my current job for years. Why liberals shouldn’t be calling her the hottest hypocrite this side of the Hudson River, is beyond me.


8 posted on 06/20/2016 7:09:57 AM PDT by HiTech RedNeck (Embrace the Lion of Judah and He will roar for you and teach you to roar too. See my page.)
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To: All

If I had to choose I’d prefer Walmart pay their employees more instead of my taxes going to their welfare, which seems to be the case.


9 posted on 06/20/2016 7:10:27 AM PDT by escapefromboston (manny ortez: mvp)
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To: bigbob

Estimating the total cost of an employee:

http://quickbooks.intuit.com/r/hr-laws-and-regulation/the-true-cost-of-paying-an-employee/#sm.000en4gut1bhhfmhrn91jocp16efm


10 posted on 06/20/2016 7:10:32 AM PDT by bigbob
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To: grundle

$15 minimum wage affects far more than just McDonalds and Wal Mart. Thousands of small shops, factories, businesses and stores pay their employees between 8-$14.99 an hour.

There are probably entire towns where no one earns $15 an hour.

This will devastate our economy.


11 posted on 06/20/2016 7:11:48 AM PDT by cyclotic (Guns don't kill people. Abortion clinics kill people)
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To: Dilbert San Diego

Wal-Mart also gives donations to community non-for-profits each month.


12 posted on 06/20/2016 7:13:05 AM PDT by stars & stripes forever (Blessed is the nation whose God is the Lord. Psalm 33:12)
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To: grundle

Prices will go up, then so will EBT card funding demands.


13 posted on 06/20/2016 7:14:58 AM PDT by P.O.E. (Pray for America)
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To: grundle

It’s not even math, it’s simple arithmetic.


14 posted on 06/20/2016 7:15:01 AM PDT by Fresh Wind (Hey now baby, get into my big black car, I just want to show you what my politics are.)
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To: escapefromboston

Did you read the last paragraph of the excerpt? Increasing their pay while increasing the welfare limits will keep your taxes paying for the welfare.


15 posted on 06/20/2016 7:17:00 AM PDT by Bob (No, being a US Senator and the Secretary of State are not accomplishments; they're jobs.)
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To: grundle

Sure they can, along with a raise in prices, those same employees will pay for the goods there selling and buying , plus paying higher taxes, leaving those same employees standard of living no better off. And by the way it’s going to 15$ an hour nationally, just a matter of time. When GOV.co can orchestrate it while saying inflation is at 2%.


16 posted on 06/20/2016 7:18:41 AM PDT by QuigleyDU
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To: grundle

A successful business hopes to make 17 cents on the dollar, more are like around 11 cents. Labor is the biggest expense.


17 posted on 06/20/2016 7:19:46 AM PDT by SkyDancer ("They Say That Nobody's Perfect But Yet Here I Am")
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To: grundle

I’M a value shopper and go to several stores each week for the best price. I only purchase BOGOs at Publix, I buy boneless, skinless, low sodium chicken breasts at Winn Dixie because of their new low price of $2.50/lb. I love Aldi for many reasons, and there are certain items I always buy at Walmart where they cost least. In the past few weeks I’ve noticed that almost all of my Walmart items have risen in price, and not just a little. What was 2.38 is now 2.98, for example. I’m sure salary increase has everything to do with it.


18 posted on 06/20/2016 7:23:39 AM PDT by EnquiringMind
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To: cyclotic

And those towns have a lower cost of living. Central government mandating the same wage across the country without regards to the cost of living variations is stupid.


19 posted on 06/20/2016 7:23:45 AM PDT by Rusty0604
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To: Dilbert San Diego

Correct. And you are one of the few who understand that when a wage goes up a certain percent, the list you put up also goes up that percent.

It isnt he wages that kills, its the government mandated taxes UC insurances, WC insurances, etc that kill.

In my former business, My WC insurance was 54.50 cents per one hundred. My UC insurance was 7.5%. And of course the FICA was about 7% for my share. Then came the Med care and all the rest. So I would in fact pay an additional 80 to 90 cents per dollar the employee made. So a employee who pulled a 500 dollar check would in fact cost me 900 dollars.

Couldnt do it, I quit since I could not pass a share of the cost down.


20 posted on 06/20/2016 7:26:35 AM PDT by crz
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