PeakTrader.com

[administrator]

PeakTrader:

I think, the CEO of Walmart deserves $35 million a year in compensation, top management deserves hundreds of thousands of dollars a year, Walmart deserves billions of dollars a year in profit, and consumers deserve lower prices.

What about the lowest paid workers? Don’t they deserve something too?

ABC NEWS Business Unit
July 2, 2010

“We’ve seen, over the past three decades, a tenfold-plus increase in the gap between top executives and average American workers.

CEOs in the country’s S&P 500 companies make, on average, 319 times more than the average American worker…in the 1970s, that ratio was 30 to 1.”

******

It’s great being at the top of the pyramid. However, if you’re at the bottom of the pyramid, which seems to be getting larger, at least you can mooch off your parents and/or government, even with a full-time job.

******

$15 trillion / 150 million workers (full and part time) = $100,000 per worker.

******

Some people confuse prices with wages.

Also, I may add, the $15 trillion is national output in a year. Some people consume more than produce, while other people produce more than consume, in a year.

A low-wage earner may sometimes be late making monthly payments and has below average credit. So, he pays higher interest on borrowing. He may decide to attend college and buy goods that exceed his income. So, he borrows.

A high-wage earner can afford to make monthly payments on time and has above average credit. So, he pays lower interest on borrowing. He can choose to save, e.g. in the stock market, or invest, e.g. building a store and buying supplies.

******

Morganovich, I’ve shown you many mechanisms in wages not found in prices many times before. Yet, you completely ignored them.

Also, I may add, a weak firm may not be able to afford a high school graduate, who’s twice as productive as a high school drop-out, who smokes marijuana (the high school graduate will refuse to work for low pay).

I’d like to see the weak firm fail, and a strong firm take its market share, to hire the high school graduate at a higher wage. The strong firm will not only gain from taking market share, it’ll also gain from the increased demand of the higher wage.

******

Wages and prices are as different as input and output.

******

Morganovich, I sure hope you don’t start a business, like a donut shop. Who knows what’ll be in those donuts (maybe, a little marijuana from the employees too).

******

Ron, so, income has little to do with paying bills? High wages or low wages makes no significant difference in the ability to pay bills?

******

The economic implications of a wage are much more than the price of labor (I explained a couple of examples above, along with others before).

A wage of $12.50 may facilitate economic growth. However, a wage of $25 or $50 may cause a severe contraction. There are constraints.

******

How is it you know exactly what the the right speed limit is on the freeway? Is it 20 MPH or 100 MPH? And why would you know better than the people driving?

Or, how does the Fed know how many bonds it should buy each month? Should it be $85 billion a month? $92.5 billion per month? $35.6 billion? Or should quantitative easing even exist, e.g. in a liquidity trap, in the U.S. or Japan.

---

Citizen Buddy:

Sam Walton had Ten Rules for Wal-Mart (Sam’s spelling) success.

Rule # 2: “Share your profits with all your associates, and treat them as partners. In turn, they will treat you as a partner, and together you will all perform beyond your wildest expectations.

But, that was a conflict for the current generation of Waltons and they had to overrule #2 with rule #9:

“Control your expenses better than your competition. This is where you can always find the competitive advantage. You can make a lot of mistakes and still recover if you run an efficient operation. Or you can be brilliant and still go out of business if you’re too inefficient.”

Walmart(current) does have a 401K plan with a 6% match, but there is no substitute for the sharing of profits with all the company “partners” as compensation.

---

What has happened with Walmart’s profits since 2008?

They have steadily increased the dividend which is usual.

In addition Walmart has been purchasing their own stock which is common.

Who has benefited? The stockholders of course and now the company is fully in control by the Walton family.

So, will the Waltons now re-instate Sam’s Rule #2 and…
re-affirm “Share your profits with all your associates…”?

---

Wal-Mart Control Soon to Tip to the Waltons
June 6, 2011

The Wal-Mart founder’s descendants are poised to see their stake in the $190 billion company creep above 50 percent, without much fanfare, thanks to the latest $15 billion share buyback program.

After Sam Walton died in 1992, family members retained a stake of around 38 percent from the mid-1990s to the mid-2000s. Starting in 2003, a series of big share buybacks began to push the family stake higher, to 43 percent in 2008 and now to 49 percent, according to the latest filings.

Wal-Mart’s first-quarter dividend amounted to $1.3 billion.

---

http://www.aei-ideas.org/2013/07/wal-mart-deserves-the-2013-nobel-peace-prize-for-improving-the-lives-of-millions-of-low-income-consumers-globally/#comments

---

PeakTrader:

“Consumption is the sole end and purpose of all production.”

Yes, grossly overpaying yourself and making big profits off your workers to raise your consumption.

******

Then, you can afford to save, while workers borrow and can’t afford unemployment.

---

http://www.aei-ideas.org/2013/07/quotation-of-the-day-adam-smith/#comments

---