June 16, 2006
Reliable data
The "Economic Policy Institute" has released a "study" indicating that Wal-Mart can raise wages without raising retail prices.
Yep. That's what they said.
They recommend that Wal-Mart slash its profits by 20% in order to raise the wages of their employees. Wal-Mart ran a 3.6% margin last year. They want to send it back to 2.9%.
2.9%!!?!!!???! DOWN from 3.6%
Granted, 3.6% of $315 billion is still an $11 billion profit at the end of the year, but, a savings account pays better than that. You can get a good 4.75% without much looking around. Wal-Mart is making a razor-thin profit here. They make less on a yearly basis Citigroup with four times the revenue (Citigroup pulled in 16.42% of $76 billion). Any less than 3% profitibility and you have to ask whether or not it's worth doing business at all. At that point it's a better investment to just buy a municipal bond and get the tax break.
The other thing they don't tell you is that the EPI is really a front group for organized labor. The Chairman of the Board is Gerald W. McEntee, the president of a massive government employees' union. The board also includes the president of United Steelworkers, United Auto Workers, and Andy Stern of the SEIU (godfather of Wal-Mart Watch). That's obviously the group of people to whom I would turn if I wanted to know how to run a business properly.
People hate Wal-Mart because they're good at what they do.
Posted by: Nathan at June 17, 2006 11:39 PM