Talking Point: Wal-Mart & Chicago

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Starka's picture
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Big story in today's WSJ--Chicago's city council has voted to force stores of 90,000 sq feet and greater than $1b (namely Wal Mart) to pay a minimum wage of $9.25/hr and $1.50/hr in bennies.
From where does that august body derive it's right (not it's power) to determine the wage scales of a private company?  For that matter, should the Federal government have this power?

babbling looney's picture
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I believe that this (retarded) decision will be struck down as being
discriminatory just as the one in New Jersey (I think) was.  For some
reason Wal Mart has become the whipping boy of the clueless liberal
moonbat left.  They don't seem to understand basic economic theory,
have any common sense and are unable to understand the laws of action
and reaction.  And these are the people that have been elected (at times)
to run our country.

While not targeting Wal Mart, San Francisco has just passed a stupid law
affecting businesses by forcing them to spend for universal health care
for all San Francisco residients.

To offset the estimated annual price tag of $200 million, firms with 20
or more workers would be required to spend $1.06 for each hour worked
by an employee, and those with more than 100 workers would have to
pay $1.60 per hour up to a monthly maximum of $180 per worker.
Companies that already offer health coverage would still have to pay if
their insurance contributions did not meet the city's funding levels.

Hmmm what do you think the results of this law are going to be on he
small business owners.  If I had a company employing 23  people, I
would have to pony up $1840 a month for extra health coverage. 
Combine that with the brilliant idea of raising wages by an additional
$2.00 hour (proposed living wage amendment) adding and additional
$7360 (not counting FICA and Workman's Comp) monthly....what would I
do.  If the minimum wage is increased you know that the long term
workers who are now making entry level wages will demand a raise.  It
has happened in the past and will happen in the future.

Could I raise the cost of my product or service to compensate for an
additional $9200 overhead cost?  (And this isn't even including the
increased costs of energy and the resultant increase in parts and
supplies.) Probably not.  Or would I just lay off 4 people and work the rest
of the guys overtime. Or do both things...Lay off workers and raise my
product/service cost.

For larger companies they can just pick up and move outside of town, like
Wal Mart and other big box retailers will do in Chicago.  And anyone
considering bringing a business to San Francisco is going to look for
other alternatives.

Politicians are clueless boobs who shouldn't be allowed to walk and chew
gum at the same time, much less make decisions that will most likely
throw us into a deeper recession than the one that is coming now.

troll's picture
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Joined: 2004-11-29

Hear  here!  When will politicians figure out that the best thing they can do is stay the heck out of the way of businesses?!?  Sadly, probably never!
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The Truth's picture
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Joined: 2004-12-01

Darn Democrats.   Never can seem to get it right.

menotellname's picture
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babbling looney wrote:I believe that this (retarded) decision will be struck down as being discriminatory just as the one in New Jersey (I think) was.  For some reason Wal Mart has become the whipping boy of the clueless liberal moonbat left.  They don't seem to understand basic economic theory, have any common sense and are unable to understand the laws of action and reaction.  And these are the people that have been elected (at times) to run our country. While not targeting Wal Mart, San Francisco has just passed a stupid law affecting businesses by forcing them to spend for universal health care for all San Francisco residients. To offset the estimated annual price tag of $200 million, firms with 20 or more workers would be required to spend $1.06 for each hour worked by an employee, and those with more than 100 workers would have to pay $1.60 per hour up to a monthly maximum of $180 per worker. Companies that already offer health coverage would still have to pay if their insurance contributions did not meet the city's funding levels. Hmmm what do you think the results of this law are going to be on he small business owners.  If I had a company employing 23  people, I would have to pony up $1840 a month for extra health coverage.  Combine that with the brilliant idea of raising wages by an additional $2.00 hour (proposed living wage amendment) adding and additional $7360 (not counting FICA and Workman's Comp) monthly....what would I do.  If the minimum wage is increased you know that the long term workers who are now making entry level wages will demand a raise.  It has happened in the past and will happen in the future. Could I raise the cost of my product or service to compensate for an additional $9200 overhead cost?  (And this isn't even including the increased costs of energy and the resultant increase in parts and supplies.) Probably not.  Or would I just lay off 4 people and work the rest of the guys overtime. Or do both things...Lay off workers and raise my product/service cost. For larger companies they can just pick up and move outside of town, like Wal Mart and other big box retailers will do in Chicago.  And anyone considering bringing a business to San Francisco is going to look for other alternatives. Politicians are clueless boobs who shouldn't be allowed to walk and chew gum at the same time, much less make decisions that will most likely throw us into a deeper recession than the one that is coming now.
Good thoughts but your calculations make a lot of assumptions.
Most importantly you are assuming that the company with 23 employees is paying all the employees minimum wage and that it would be a $2.00 bump across the board.  I find it hard to believe that a company would have 23 full time employees at minimum wage.  Additionally, you assume that all 23 full time employees are working 40 hours a week.
In theory it could happen but it is a worst case scenario.  You might want to apply some more rational thoughts to you numbers similar to how you did your rationale. 
Keep in mind that if your numbers are illogical that it destroys your rationale.
Try again.

hubbabubba's picture
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Joined: 2006-08-03

truth, where are you at? 
That darn dem Mayor Daley is p.o.'d about the bill.  I think he was going to veto it as of this morning.  Maybe he already did?
 
Daley may be many things, but he has made Chicago a great place to live.

gotellsparta's picture
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Joined: 2006-08-04

The free market is a beautiful thing with good stewardship.  The fed believes some of the stewards are stalwart board members that need to be reminded of the cost of labor and that they should be targeted state by state.  With NJ's precedent the fed will be continuously stopped from pursuing their "we know best for you" practices on private enterprise and eventually will lose determination.  If the workers would stand up for themselves more and stop calling their representatives to complain they might actually affect change.  Someone needs to show the unhappy employees the door.  Their free to stop working at Wal-Mart at any time  and stop supporting them by not contributing labor.   

troll's picture
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Joined: 2004-11-29

gotellsparta wrote:The free market is a beautiful thing with good stewardship.  The fed believes some of the stewards are stalwart board members that need to be reminded of the cost of labor and that they should be targeted state by state.  With NJ's precedent the fed will be continuously stopped from pursuing their "we know best for you" practices on private enterprise and eventually will lose determination.  If the workers would stand up for themselves more and stop calling their representatives to complain they might actually affect change.  Someone needs to show the unhappy employees the door.  Their free to stop working at Wal-Mart at any time  and stop supporting them by not contributing labor.   
Dude I get the idea you're trying to say something important(at least to you) but somehow the actual MEANING isn't getting through so clearly.....  ::scratching head::Workers unite!  Let's march on Wal-Mart! 
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babbling looney's picture
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Most importantly you are assuming that the company with 23 employees is paying all the employees minimum wage and that it would be a $2.00 bump across the board.
You assume that I assume that the employees are making minimum wage.  You also didn't read my words very carefully.
If the minimum wage is increased you know that the long term workers who are now making entry level wages will demand a raise.  It has happened in the past and will happen in the future.
I don't know how old you are, but I remember distinctly when the minimum wage was raised, sometime in the 70's.   I was working in a union job....decidedly not minimum wage, however as with many unions the wages are indexed to the minimum wage. (Who do you think are the primary backers of a minimum wage hike......hmmmmmmm?)Therefore, when the minimum was raised and entry level employees were making the same wages as people who had worked for several years, you had better believe that EVERYONE got a raise.  And as always when the government interferes in the free market the resulting across the board raises and additional regulatory costs get passed on to the consumer.
If you don't believe my hypothesis that people will be laid off if the minimum wage is increased, then how about some historical information in a study from the Cato Institute regarding subsequent the drop in employment resulting from the Clinton minimum increase.

NASD Newbie's picture
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That woman is right--as she almost always is, except when the corrects me.
But the points seem moot since the Senate shot down the increase in their frenzy to deny the "evil rich" an opportunity to leave an unlimited estate to the heirs of their choice.
Class warfare--it's far better to hurt a few thousand wealthy families than it is to raise the minimum wage.
Even though many union contracts are indexed to the minimum wage and unions are buttboys for the Democrat party.

menotellname's picture
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Joined: 2004-12-01

babbling looney wrote:
Most importantly you are assuming that the company with 23 employees is paying all the employees minimum wage and that it would be a $2.00 bump across the board.
You assume that I assume that the employees are making minimum wage.  You also didn't read my words very carefully.
If the minimum wage is increased you know that the long term workers who are now making entry level wages will demand a raise.  It has happened in the past and will happen in the future.
I don't know how old you are, but I remember distinctly when the minimum wage was raised, sometime in the 70's.   I was working in a union job....decidedly not minimum wage, however as with many unions the wages are indexed to the minimum wage. (Who do you think are the primary backers of a minimum wage hike......hmmmmmmm?)Therefore, when the minimum was raised and entry level employees were making the same wages as people who had worked for several years, you had better believe that EVERYONE got a raise.  And as always when the government interferes in the free market the resulting across the board raises and additional regulatory costs get passed on to the consumer.
If you don't believe my hypothesis that people will be laid off if the minimum wage is increased, then how about some historical information in a study from the Cato Institute regarding subsequent the drop in employment resulting from the Clinton minimum increase.

Nice thoughts.  Wrong...but nice.
I don't know how old YOU are and I don't really care.  However, I find it quite amusing that bank tellers starting today make the same thing as bank tellers that have been with the bank for 30 years.  Somehow that kind of blows your little theory out of the water.
Again...your little theory about people getting laid off has nothing to do with a minimum wage hike and everything to do with an employer that doesn't properly manage expenses and has too much dead weight.  Hell...there hasn't been a wage hike at Morgan Stanley and look what happened.

babbling looney's picture
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Joined: 2004-12-02

your little theory about people getting laid off
Well, I'm flattered, I suppose, that you equate "my little theory" with the historical proof and validation of studies from the Cato Institute.  However, since you have an obvious reading comprehension problem, it is most likely futile to continue to debate with you.   It is also incomprehensible that someone who is "supposed" to be in the financial advisory industry is so completely ignorant of basic economic theory, principle and historical evidence.  I pity your clients.
And don't give me that MENSA crap.  I qualify too.... if I cared to join.  It is evident that your political persuasions have blinded you to the ability to rationally evaluate data.
"There are none so blind as those who will not see.

troll's picture
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Joined: 2004-11-29

menotellname wrote:babbling looney wrote:
Most importantly you are assuming that the company with 23 employees is paying all the employees minimum wage and that it would be a $2.00 bump across the board.
You assume that I assume that the employees are making minimum wage.  You also didn't read my words very carefully.
If the minimum wage is increased you know that the long term workers who are now making entry level wages will demand a raise.  It has happened in the past and will happen in the future.
I don't know how old you are, but I remember distinctly when the minimum wage was raised, sometime in the 70's.   I was working in a union job....decidedly not minimum wage, however as with many unions the wages are indexed to the minimum wage. (Who do you think are the primary backers of a minimum wage hike......hmmmmmmm?)Therefore, when the minimum was raised and entry level employees were making the same wages as people who had worked for several years, you had better believe that EVERYONE got a raise.  And as always when the government interferes in the free market the resulting across the board raises and additional regulatory costs get passed on to the consumer.
If you don't believe my hypothesis that people will be laid off if the minimum wage is increased, then how about some historical information in a study from the Cato Institute regarding subsequent the drop in employment resulting from the Clinton minimum increase.

Nice thoughts.  Wrong...but nice.
I don't know how old YOU are and I don't really care.  However, I find it quite amusing that bank tellers starting today make the same thing as bank tellers that have been with the bank for 30 years.  Somehow that kind of blows your little theory out of the water.
Again...your little theory about people getting laid off has nothing to do with a minimum wage hike and everything to do with an employer that doesn't properly manage expenses and has too much dead weight.  Hell...there hasn't been a wage hike at Morgan Stanley and look what happened.You mean too many Vice-Presidents of Paperclip Procurement and Useless Options Strategies....like yourself? 
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NASD Newbie's picture
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Joeboy, were you in the sauce last night?
Menotellname shows none of the traits necessary to become a Vice President of anything.

troll's picture
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NASD Newbie wrote:Joeboy, were you in the sauce last night?
Menotellname shows none of the traits necessary to become a Vice President of anything.As a matter of fact I was!  
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NASD Newbie's picture
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joedabrkr wrote: NASD Newbie wrote:
Joeboy, were you in the sauce last night?
Menotellname shows none of the traits necessary to become a Vice President of anything.
As a matter of fact I was!  
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Honesty is the best policy.

Philo Kvetch's picture
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NASD Newbie wrote:joedabrkr wrote: NASD Newbie wrote:
Joeboy, were you in the sauce last night?
Menotellname shows none of the traits necessary to become a Vice President of anything.
As a matter of fact I was!  
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Honesty is the best policy.

You should try it some time.
 
Isn't this fun, Putsy?
I told you that I owned you, so you showed me by not responding to anything I post.  Now I can post at will and you can't respond!
I still own you, boy.

troll's picture
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Philo Kvetch wrote:NASD Newbie wrote:joedabrkr wrote: NASD Newbie wrote:
Joeboy, were you in the sauce last night?
Menotellname shows none of the traits necessary to become a Vice President of anything.
As a matter of fact I was!  
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Honesty is the best policy.

You should try it some time.
 
Isn't this fun, Putsy?
I told you that I owned you, so you showed me by not responding to anything I post.  Now I can post at will and you can't respond!
I still own you, boy.

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//-->This is starting to sound like a prison movie......!

no idea's picture
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Joe, it's shades of Cool Hand Luke....."What we have here is a failure to communicate".

troll's picture
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no idea wrote:Joe, it's shades of Cool Hand Luke....."What we have here is a failure to communicate".Did Cool Hand Luke ever claim to "own" anyone? 
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no idea's picture
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Maybe all those boiled eggs???

Philo Kvetch's picture
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no idea wrote:Maybe all those boiled eggs???
He DID win the bet though!

entrylevelFA's picture
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babbling looney wrote:
your little theory about people getting laid off
Well, I'm flattered, I suppose, that you equate "my little theory" with the historical proof and validation of studies from the Cato Institute.  However, since you have an obvious reading comprehension problem, it is most likely futile to continue to debate with you.   It is also incomprehensible that someone who is "supposed" to be in the financial advisory industry is so completely ignorant of basic economic theory, principle and historical evidence.  I pity your clients.
And don't give me that MENSA crap.  I qualify too.... if I cared to join.  It is evident that your political persuasions have blinded you to the ability to rationally evaluate data.
"There are none so blind as those who will not see.

Babbling Looney is absolutely correct, junior.  Here's the way it works.  When you set a price floor above market equilibrium price (in this case, the price of labor), you wind up with inefficiency because now the price floor strikes the supply and demand curves at different places, not their equilbrium crossing point.  So, what happens is employers are forced to pay above market wage, therefore the quantity demanded of labor decreases (this is the inefficiency).  The markets can correct everything themselves, we don't need Ralph Nader telling us what the "real market wage" should be. 
Check out anything you can from the Cato Institute.  Also, writings by Ludwig van Mises, Murray Rothbard, and even Steve Forbes will greatly help your understanding of free markets and their functions.

Philo Kvetch's picture
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Government's mandate is to keep the field level by making all players play by the rules.  I've often wondered why government feels it's function is to tell others how and where to spend their money.

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