Thu
Jan 11 2018
04:44 pm

Walmart says they are giving raises and bonuses thanks to the Trump/GOP tax cuts. Which is curious, because Target also gave the same raises to their employees before the tax cuts were passed.

Also, Walmart has about $7 billion in cash and net income of about $14 billion. Not sure why they needed a tax cut to pay out $700 million in raises and bonuses.

Regardless, the article suggests the real reason for the move: "Although Walmart linked the moves to the tax cuts, it faces increased competition for the most qualified workers as the labor market tightens."

mjw's picture

Sam's Club

And then there's this:

Walmart is abruptly closing 63 Sam's Club stores and laying off thousands of workers

(Updated link to one with more details. So far there's one in Memphis and one in Nashville on the list.)

Woodchuck's picture

Less money to the government, more money for employees

Walmart historically pays between $7 and $8 billion in taxes each year, such that when the effective rate comes down, there is less money paid to the government. Currently Walmart shareholders collect a tick over $2 a share in dividends each year and that is a necessary commitment for any publicly held entity. Assuming the business continues to be run profitably and in the best interest of the shareholders, less money to the government means more money to the officers, directors, and employees of the company.

The locations where the Sams Clubs are closing are probably better aligned to communities where Costco has recently opened a pioneer outpost.

R. Neal's picture

Rational

Rational comments.

Counterpoint...

Walmart historically pays between $7 and $8 billion in taxes each year

On $500 billion in sales and $125 billion in gross profit.

$2 a share in dividends each year

Only slightly better than a no-risk CD.

more money to the officers, directors, and employees of the company

Wonder how much their CEO, who makes about $25 million per year, will get v. the $1000 extra for a long time hourly employee?

(That last one is a cheap shot because I typically don't begrudge anyone getting paid whatever someone else is willing to pay them.)

fischbobber's picture

Wages and taxes

Walmart doesn't pay taxes on money it pays for wages.

Funny how a union operation committed to paying a living wage, like Costco, can out-compete an anti-union entity like Sam's. Costco didn't have to wait for a tax cut to pay their employees fairly.

Somebody's picture

Subsidies

It's also been estimated that Walmart benefits from $6.2 billion in government subsidies to support the needs of its employees.

So, you know.

bizgrrl's picture

"Although Walmart linked the

"Although Walmart linked the moves to the tax cuts, it faces increased competition for the most qualified workers as the labor market tightens."

The increased competition is probably a big issue. There are "we're hiring" signs all over the place for these entry level types of jobs.

Woodchuck's picture

No need to throw rocks at Walmart, just because its successful

doesn't mean it's wrong, doesn't mean its bad, and doesn't mean it doesn't consistently treat its employees fairly (or it would have collapsed years ago)

Cities and counties, including Knoxville, have thrown money at the construction and operation of Walmarts for years, yearning to suck up some of that sales tax revenue a giant brick and mortar retailer spins up along the way.

Walmart, Food City, Kroger, McDonalds, and Cracker Barrell are the largest non government/not non profit employers in Knoxville, unfortunately, the vast majority of the positions for these companies don't require advanced professional degrees, many don't really require college degrees, a lot of the full time positions will require a high school degree and so we complain about the wages/benefits/compensation associated with those positions that don't require a tremendous amount of experience, skills, and training, particularly in an economically regressive business community like Knoxville? There aren't an abundance of great paying jobs for workers with a high school education, few marketable skills, and little to no training components for their efforts.

The most recent ballyhooed announcement that Discover Communications will move the balance of its operational environment to Knoxville was based primarily on the LOW COST OF DOING BUSINESS (that means employee wages/perks/benefits/low taxes)in Knoxville, Tennessee. Do we now need to be throwing rocks at another business that puts the back end of their business in Knoxville while the front end goes to midtown Manhattan and certain technical components stay in the D.C. suburbs?

The labor intensive workforces at Denso, Clayton, MasterCraft and the other ark makers on the lakes aren't even in Knoxville, let alone in Knox County.

Regal Entertainment still hasn't moved into the multi million dollar palace orchestrated by the City of Knoxville to keep the South Knoxville Riverfront Development from sliding into the river. Now that Regal has been sold to a British concern based in London, the operations may actually move to Los Angeles or to Denver anyway, where the business was headed before the City threw a $9 million life preserver into the river.

Throw rocks at Walmart, nah, I'm glad they are putting some of the citizens of Knoxville to work, to give them purpose and a role in a community where roles for the lightly educated, the untrained, and limited skill sets are very hard to come by.

fischbobber's picture

Nobody throwing rocks at Walmart.

You are clearly ignorant of how economies work. We were simply pointing out some of the many flaws in your argument. For instance, you clearly know nothing about operating a meat and seafood department. No skills or training? You must have a business degree.

yellowdog's picture

So here is a question:

Why does Knox County (and surrounding counties) have so many people who are "lightly educated,... untrained, and (with)limited skill sets?"

jbr's picture

smothering pragmatism, lack

smothering pragmatism, lack of vision, lack of grasp of delayed gratification, disdain for idealism, lacking imagination or foresight

Metulj From the Lurkzone's picture

The Walton family owns an

The Walton family owns an estate near S. Deerfield, MA as various scions attend Deerfield Academy. DA is one of those schools that either you pay full freight for your stupid kid or you pay nothing because you are smart, poor, and can pass the entrance process. Anyhow, they use this house one week a year: Parents' Weekend. They paid $5.5 million for a house they occupy for 72 hours a year.

Eat the rich.

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