Friday, November 16, 2012

Wal-Mart Black Friday Strike

Who wants to make a bit more money? I think we can all agree, if all we had to do for a raise is ask our boss, a lot of us would be in our bosses office every Friday! The reason we cannot do that is if we were to demand more money then the company feels we were worth, then they would simply let us go.

Enter collective bargaining. This is the principal, in which if everyone, or a large portion of the workforce asks for a raise, the company either has to go through the cost of hiring and training ALL new employees, or simply give the raise. Sounds like a great idea right, sort of like an ultimatum. The problem with this situation is it is artificial, the end result is influenced not by the value of the worker, but by the ultimatum itself.

This is what the Wal-Mart Strike is attempting to do.

On Friday night your girlfriend says she wants to go out with you for the evening and you say, “honey, I am going to the bar with friends or I will leave you.” She may agree, but it is not because she wants you to go to the bar. Demand this ultimatum a few more times, and you will find yourself without a job, I mean girlfriend.. This is especially the case if you are not that “skilled” of a boyfriend in the first place, and to be honest most Wal-Mart workers are “unskilled”. "Unskilled does not meant they lack any talents, they could be Lawyers, Doctors, Musicians, but if they are doing a job which a high school dropout can do then that is why they make such low wages.  If they ask for more, someone else will do it for less!

Some would say, Wal-Mart can afford higher wages, I mean they did make $447 Billion Dollars last year right? Well, no not actually. They really made $26.5 Billion before taxes on $447 Billion is sales, and after they paid $9 Billion to Uncle Sam, they only earned $15.5 Billion.

$15 Billion dollars is still a lot of money right?

Well, yes it is certainly, but in comparison to their revenue it's only about 5%, so for ever dollar they sell they earn $.05. When you go buy some flowers and chocolates for your girlfriend to make up for your ultimatum you offered her earlier, they make $2.50 off that $50.00 you spent.

But certainly they could increase wages just a bit right?

Well seeing as Wal-Mart employs over 2.2 Million employees, if we assume an average work week of 32 hours, increasing wages just $2 an hour would cost $7,321,600,000.00. It should also be said, most of these workers who are striking do not just want more money, they want better health care, and more employees to reduce their workload as well.

The more complicated aspect is how the Wal-Mart Strike affects Wal-Mart stock, and their ability to continue their business. Hate it or love it, we live in a capitalist society, this means investors put their money where it will benefit them the most. If because of this Wal-Mart Strike, Wal-Mart chooses to reduce its earnings by 7 billion dollars, investors will simply invest in Target, Macy's, K Mart, CVS, Rite Aid, or Dollar Tree. All of which have very similar labor practices as big bad evil Wal-Mart.

As we approach Christmas Season, this “Wal-Mart Strike” could seriously affect Wal-Mart's bottom line, however it will also affect Target's bottom line as well, in the opposite way! If you are looking for a place to put your money, might want to look at some other retail chains.

I understand these workers want better benefits and more money, but honestly if they really feel they deserve them, they are free to apply at many other companies nationwide. However if they lack the ability to do those other jobs, they really shouldn't blame their situation on Wal-Mart.

Thanks for reading!

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