WDEL Blog: Allan Loudell

Another Walmart embarrassment

With questions about whether a Wall Street bubble will burst - or at the very least, that stocks will go through a mid-course "correction" as the Fed eases up on the stimulus - I heard a financial analyst urge small investors to reassess their stock portfolio. What kind of stock would he recommend for stability? Walmart, of course!

Have you been following the story of the Walmart food drive at one Walmart store in Canton, Ohio - to help OTHER Walmart employees? This isn't the Walton family coming to the rescue. This is one group of underpaid employees being asked to donate to co-workers in even worse shape. (Supposedly the workers themselves organized the food drive - not the managers - but in the shadowy world of Walmart, who knows?)

Just this week, the National Labor Relations Board determined Walmart had unlawfully threatened retaliation against its workers if they decided to strike on "Black Friday" 2012.

But can Walmart's model of ever-squeezing-people-to-the-bottom be sustained? Just a couple of years ago, Walmart began another round of cost-cutting by reducing already meager benefits for parttime workers and hiking premiums for remaining full-time workers. But this cost-cutting scheme boomeranged. Walmart started losing customers as shelves were no longer regularly replenished. Walmart relented a little... hiring more full-time workers in time for the holiday shopping season.

On a previous blog a couple of years ago, I posted on the evidence that Walmart undercuts even China's minimal labor standards by purchasing the output of clandestine shadow factories that officially don't exist -- of course, with some insulation providing plausible deniability.

Here's a philosophical question: Do U.S. taxpayers not indirectly subsidize the Walmarts of the world - especially the profits of the Walton family - through minimal safey net programs that prop up poorly compensated Walmart workers?

See this account about Walmart from The INDEPENDENT of London...


Many critics of Walmart have pointed to Costco as an example of a retail company which provides substantially higher compensation to its workers. How? See this article from DAILY FINANCE...


Could something as basic as geographic location affect a company's corporate culture and philosophy? Walmart is based in rural Arkansas, and Costco, in Washington state. Big difference!

That, indeed, may hint at a socio-economic vicious circle: Walmart's customers tend to be of far more modest means than Costco's. Because of the low prices - and indeed even the food selection - they'd favor Walmart over Trader Joe's.

That segueways to an earlier commentary/analysis, which I saw in BLOOMBERG, "Why Walmart will never pay like Costco"...


Posted at 8:19am on November 21, 2013 by Allan Loudell

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Comments on this post:

Thu, Nov 21, 2013 9:37am
Yesterday on WDEL, I forget where, the figure came up that the income of the 6 owners of Walmart, together have more net worth than the aggregate of the bottom 30% of America.....


Shouldn't they be asked to fund at least 30% of America's debt? That would be... $16 Trillion X 30/100ths or $480 billion dollars paid down towards our national debt. At least before we start eliminating Social Security and Medicare...

Thu, Nov 21, 2013 6:12pm
It's time for the wet babies whining about Walmart to get their diapers changed. If they don't like what they're getting paid there, then go to work somewhere else!

And don't bother feeding me some lecture about how there's no jobs out there. The oil and gas industry in North Dakota is hiring.

Thu, Nov 21, 2013 9:03pm
Actually, it would be cheaper to tax the wealthy and create new government positions such as regulating banks and insurance executives... Those new jobs would then spend and grow the economy...

As soon as we raise the tax rates on the top 1%, our economy takes off.... As soon as we give tax cuts to the top 1%. it shrivels up. That trend has been consistent ever since we invented income taxes... It is the only economic law that is predictable.

Thu, Nov 21, 2013 11:47pm
Sorry but if they don't want to work at Walmart, then let them "vote with their feet" and find a job with one of Walmart's competitors... If enough do, Walmart will either have to compete or go out of business. That's the way private sector works...be competitive or go out of business.

Fri, Nov 22, 2013 2:15am
Hey Kavips: Could you send me a detailed list of who those 1% are? No, I don't mean a few high-profile names, but a complete list of the names and addresses of those so-called 1%. I'll bet ya they don't even exist.

If Hitler was able to round up 6-million Jews for mass-slaughter, then that 1% list should be easy to find given the current Obama abuses of the IRS and other powers.

Fri, Nov 22, 2013 8:21am
Why not (instead of pursuing the upper 1%) we simply go flat tax and remove ALL LOOPHOLES...only then will everyone truly pay their "fair share".

If not a flat tax then how about a CONSUMER tax? You pay taxes on your purchases. Buy a mansion or a Ferrari and you will pay more taxes than someone in the Lower/Middle class who buys a small house and drives a used Subaru.

Fri, Nov 22, 2013 12:47pm
Pizza, would you want me divulging YOUR income if you were one? Of course I'm not going to give you a list. Have you lost all reason? That is proprietary information.

But if you are curious, Forbes publishes lists .. That can give you an idea...


Earl, I'm surprised you are that ill-informed of tax law and tax economics.

If you have a flat rate, let's choose 10% then someone making $20,000 has to live off of $18,000. Have you ever raised a family off $18,000? Obviously they will need some subsidizing, and that subsidizing will cost quite a bit more than the $2000 taxed.... one comes out negative.

If one is making $200 billion per year, and you tax them 10%, they have to live off $180 billion a year. Have you ever raised a family off of $180 billion a year? Neither have I, but I bet it is a lot easier than raising a family off of $18,000....

Flat taxes don't work.... If there were such a thing as a really "fair" tax, then to be fair, that billionaire would be taxed $199,999,982,000 and like his neighbor, live off $18,000 a year.... Fair Taxes don't work either...

But wait, you say... What if you eliminated all those at the bottom and established flat taxes based on income levels? Yea, that would work you say....

You are right in that case. It is called a tiered tax system. It is what we have. It is working fine, just that now that we need more money to pay down some debt; the rates on the top just need to rise a little to be able to cover those payments...

Why scrap what is already working so well? A flat tax, just tiered at income levels..?

The problem with loopholes is that as soon as you rid yourself of them, they get put back in. If not enough people are hiring veterans, you put a loophole in to write off all money used to pay for a veteran... Currently the amount of Loopholes is equal to the amount of taxes we take in. In other words, without loopholes all would be paying double their taxes...

Not a good option at this time either.

Sun, Nov 24, 2013 11:32am
In defense of Wal*mart, Sam Walton had a penchant for pistachios, and hated having to pop open the shells. As part of his legacy, Wal*mart as a public service, currently sells precracked pistachios at their cost, or slightly below, to enable this benefit to be available to all citizens...

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