It’s not just WalMart that underpays and relies on tax payers to support their employees. You say if WalMart raises their prices they will not be competitive...yet there are companies that do in fact provide living wages and benefit packages that keep their employees off state/fed assistance programs.
“Data published by the state of Massachusetts reveal that Walmart has 4,327 employees — approximately one-quarter of its workforce — enrolled in the state’s Medicaid program or one of two other publicly subsidized health insurance programs. Insuring these employees and their dependents costs taxpayers $14.6 million a year. Target has an even larger share — more than one-third of its Massachusetts workforce, or 2,610 people — enrolled.”
Source:
http://www.ilsr.org/chains-walmart-foods-free-ride-taxpayers-expense-responsible-small-businesses/
My point is that taxpayers are supporting WalMart’s ability to offer low wages. Yes, there are people who need jobs and will jump at the chance to have a job. BUT...these same folks who are starting out will still require assistance from the state to eat and for their healthcare.
For those who say it will lead to fewer jobs...that not entirely the reality at retail service establishments. If lines are long or shelves are empty due to not enough help...guess what...folks will shop where they can actually buy what they want when they want it.
In some places...there may not be a lot options on where to shop. But it’s also true that some one may see an opportunity and decide to open up shop. The thing about WalMart that I’ve seen, are more and more businesses have figured out how to successfully compete against WalMart AND have enough business to be profitable. (and offer good wages and solid benefits).
Based on my experience... one way to go up against WalMart is to have very good customer service, reasonable prices and excellent in stock conditions. It also doesn’t hurt to have an employee base that cares about doing a good job and a management staff that realizes the importance of playing at a higher level.
What you are saying is that there is a market for a company that charges more, provides better service, and pays more.
And you are saying that some company already exists for that market.
And we know that whatever these other companies are, and we know some of them and they are doing very well, are already competing against Walmart.
We also know that they have not taken over Walmart in any market where they compete. They can compete, but they can not replace.
That tells us that there is a significant market for the lower prices Walmart offers, that has no interest in better customer service or higher prices.
If Walmart became Costco-2, they would lose the market they currently have, and would compete against the market Costco has; and would likely not do well against that market, since CostCo has a high brand loyalty.
Target would be very happy if Walmart would take this approach. Target is basically marketing for a slightly upscale version of the cheap shopper market. They offer less items, in a nicer store. As you note, they don’t pay well; in our area, the turnover in Target and Walmart associates is high.
BTW, the comparisons with Costco show the same thing, a high turnover in Walmart employment vs Costco. Many comparators call this a bad thing.
But it could also indicate that Walmart is providing a useful service — giving people their first jobs. Some people like Walmart enough to stick it out and rise up the ranks, most don’t, and move on to other jobs that pay better in other companies (like CostCo), once they have the experience.
Next time you are in Costco, go up to some of their workers and ask them two things; first, how long they worked there, and second, if they worked somewhere else first. Do the same at a Walmart.
What you will find is that the average Costco employee has worked longer at the store, and also had experience at another store before they were able to get the Costco job. Walmart has a lot of first-timers; they also have a lot of people who worked somewhere else, but not in retail (like the greeters, retired people looking for something fun).
Greeters are a great example of how Walmart provides a more unique employment, one that does NOT pay well, because frankly the job is trivial “Hello, welcome to Walmart” is hardly a task that needs experience). But the people in those jobs don’t need good pay, they are doing it for fun. Or it is their first job ever, and they will get to put it on a resume that they showed up for work every day, and that will help them get a better job later.
No company has any control over, or any responsibility, for what government decides to do with your tax dollars. It is not Walmart’s fault that people have voted for governments that give taxes away to poor people.
But as long as government does that, people will undervalue their employment, because they will have a secondary source of “income”.