Friday, December 5, 2014

The Liberal Myths Being Told About Wal-Mart

On Black Friday, liberals and unions were out in force protesting Wal-Mart's pay practices; arguing that this mega-retailing giant should pay at least $15 an hour. Of course, most of the protestors were union personnel who don't work at Wal-Mart, and who want them to unionize so their dues collection will increase and then they can help Democrats get elected.

One spokesperson for the protestors claimed that Wal-Mart can afford to pay better wages because the Walton's are billionaires; claiming they collectively are worth $150 billion.  Of course, while he was speaking, you could see a number of bobble-heads in the background nodding in agreement.

Yes, the Walton family is worth billions, but that extraordinary net worth has more to do with the fact that they own stock (51%) in the company and less to do with company profits. In other words, their wealth is separate from Wal-Mart's profits.  This in the same way Bill Gates -- who no longer works for Microsoft -- is worth $81 billion.  Giving workers a raise to $15/hour, will not diminish the Walton Family's wealth one iota.  All it would do is raise prices for the over 100 million people who shop at this retail giant each year.  They are the ones, many with low incomes, that will be hurt the most by this supposed minimum wage hike.

Then there's this;  Wal-Mart, as a company, only makes a modest profit of a little over 3%.  Compare that to every liberal's darling, Apple, who returns profits in excess of 20%.  So, when you buy that iPhone or iPad for, hypothetically, $400, you wind up paying Apple $80 for the privilege of owning their products.  If Apple was Wal-Mart, that same product would only cost you $330; based on a 3% profit margin or a profit of $10 on a product that costs $320 to make.*  Of course, no liberals seems to want to protest at Apple about the fact that about 170,000 underpaid and overworked Chinese are used to help them achieve that very hefty 20% profit margin.

The savings that Wal-Mart offers is what that company is all about.

In this country, we have 48 million people in poverty.  What Wal-Mart gives them is the ability to buy many things that they could not otherwise afford.  At the same time, the average salary at Wal-Mart is $12.94 per hour, which is substantially higher than the President's proposed $10.10 minimum wage.  And, that $12.94 is equivalent to nearly $27,000  on an annualized basis.  A salary that is significantly higher than the $20,600 which the average Mississippian makes in a year; and not far from the $28,000 that the average American makes.

The simple fact is that union personnel want to lower the savings that more than 100 million shoppers receive by shopping at Wal-Mart.  Savings that allows them to buy other products and services from other retail outlets.  In doing so, jobs are being created elsewhere in our economy, but liberals (especially like Senator Elizabeth Warren) would rather that this economic benefit be stopped. Mostly hurting the lower class and the poor; yes, the people they always talk about helping.

*Disclaimer: The profit example is a hypothetical that assumes that both Apple and Wal-Mart are both the manufacturer and the direct sellers of an identical product; and, that, in manufacturing their own products their costs would be the same.  It also assumes that for every product they produce, the profit margins are equal; which is never the case.


Walmart hit with protests on Black Friday:

America's Richest Families:

Bill Gates Net Worth:

Wal-Mart Stores Profit Margin (Quarterly): 3.12% for Oct. 31, 2014:

Apple Profit Margin (Quarterly): 20.10% for Sept. 30, 2014:

Quick Facts: Mississippi Versus U.S. Averages:

Apple's Chinese Employee Problems:

Warren puts pressure on Wal-Mart | TheHill:

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