Heard this on NPR, at one point a company representative said something akin to "the only test of if the company changes are enough is if this happens again". In other words, "just wait, if we don't kill a bunch of people again everything worked out!".
Not to defend GM when they don't deserve it (they don't) but how else will you really, truly know for certain if the changes worked? Just practically speaking the only way to really know if certain types of changes are effective in the real world is to try it in the real world. You can plan and evaluate until the cows come home but sooner or later you have to try the solution out for real. Yes it's scary but sometimes there aren't any alternatives.
If he was a licensed PE he had a professional and legal obligation to intervene with the switch, regardless of how he felt about it. If he wasn't a PE, then whomever the PE was that was managing him and approving his designs is to blame.
In automotive engineering PEs are a rarity. There is no requirement whatsoever that a PE be involved or that one signs off on any designs. You find PEs in civil engineering and some aerospace and a few other fields but most engineering does not require such a certification. There would be a production part approval and there would be an engineer of some sort who would be responsible for the design and production. Most parts in US automotive production require a PPAP document to be completed for both design and production processes. It's usually a pointless waste of time but there is a formality to the process and it does assign responsibilities.
Because the old GM is gone. The shareholders and management switched. It's a new company with the same name and it doesn't deserve to be liable for the past company.
"Doesn't deserve"? Gotta disagree with you there. Sure the company technically is incorporated as a "new" company and some (but not even close to all) of the management has changed but fundamentally it is still the same company. You are giving them a pass based on some legal technicalities which they do not deserve. In all practical terms it is the same company, selling the same products, under the same name, with mostly the same employees and the same facilities.
I run a company that supplies parts to GM. (we're a Tier 3 supplier) I honestly doubt there was much if any cover up. Frankly in my experience GM is too incompetent for that. I see their engineers do stuff all the time that is borderline retarded and the company is so large it's hard to even find a person responsible for a specific issue, much less hold them accountable. While I can't say for certain either way, I tend to think the cause of this fiasco is more structural than criminal. I think this is probably a case of incompetence of such a degree that it appears as malfeasance.
I would go a step further, in that the SEC was completely complacent in the whole Banking Investment fraud that led up to the collapse of the economy.
If you want to blame anyone, blame Congress. The SEC is badly underfunded and that is entirely the fault of Congress. I won't get into the politics of why but you can probably guess the various political motives involved. The SEC simply doesn't have the funding or the manpower to oversee what they've been charged with managing adequately.
Police don't necessarily prevent murder, but they are there to clean up the mess.
Go live somewhere were there aren't any police (like Somalia) and let me know how that works out for you. I'm sure you'll live a long an prosperous life.
SEC isn't just an organisation that gives a stamp of approval to well run investment schemes. They actively stamp out any that don't register with them and report to them. That makes the entire economy very vulnerable to poor decision making by a mere handful of people.
No, what it does is help keep crooks from putting forth "investments" that really are just frauds. It's the same reason we require drugs to get FDA approval before being sold to the public.
It also can seriously hinder innovation
You REALLY don't want fast paced financial "innovation". That was a huge part of how we got into the big recession in 2008-9. A lot of "financial innovation" is really fraud with a clever name.
If the SEC lost their enforcement powers
The SEC has their enforcement power for some extremely good reasons. There needs to be a cop on the beat.
One minute you claim that a 50% wage hike would cause Walmart to be unprofitable, and the next you claim that they would increase prices.
50% UNILATERAL wage hikes. UNILATERAL. Do you understand what that word means? Walmart alone = Unilateral. Minimum Wage increase = everyone raises prices. Unilateral = no profit.
Regarding payroll taxes, you're oversimplifying.
Of course I am because explaining the whole thing would require writing a freakin' novel.
But that's my point. 7.5% isn't a "LOT" higher.
BULLSHIT 7.5% isn't a lot higher. That is HUGE in an industry where profit margins are low single digits.
It's a lot less than the 50% growth in wages that we're talking about.
Only if you don't consider the entire economy. You are simply robbing Peter to pay Paul. You increase service sector wages and will cost manufacturing jobs. Some benefit, others don't.
1) Tarriffs
Which are a stupid idea. Tariffs on what? Your plan is to make everything more expensive? Tariffs raise prices for everyone to benefit a smaller group. Tariffs on steel make every car more expensive. Want to create inflation? Go ahead and start a trade war and enjoy the resulting recession.
2) The domestic service/retail industry dwarfs the domestic manufacturing industry.
The US manufacturing sector accounts for over $3 Trillion annually and has a multiplier effect beyond that larger than any other sector. The only country that has a manufacturing sector even close in size is China. Furthermore just because much of the economy comes from another sector doesn't mean it is a good idea to kill US manufacturing.
3) The money comes with consequences, and on the whole, it's still a positive.
Perhaps but you've hardly proven that. And bear in mind that I actually support raising the minimum wage. But if you raise it 50% overnight, my company will be out of business tomorrow and we're hardly the only ones. There is no way we could absorb a hit like that. I think the minimum wage should be raised some, indexed to inflation and to the poverty rate with allowances for exceptional economic conditions (like a big recession).
There is a big world outside of NYC. Try it sometime.
your ignorance of other (read: more expensive) corners of the country is funny
And your sense of entitlement isn't funny at all. Here's a crazy notion. Move somewhere less expensive until you can afford to live in the expensive location. Nothing is forcing you to remain in NYC if you can't afford it. I went to school not far from NYC and you know what? I live in a place which costs 1/4 as much for housing because spending extra money just to live in a dense city when I can't afford it is stupid.
It's truly sad how many of this sort of ignorant comments a story like this brings out.
Funny, I'd say the same thing about your comments.
If you're (1) a single person (2) with no kids (3) in good health (4) with no dependents (5) in an area where rents and cost of living aren't outrageous, yeah, it's almost "certainly enough to get by.
I have a staff full of people who make $20,000-30,000 a year working full time, most of whom have kids and several of whom are in not the best health. The cost of housing isn't outrageous where we live (in the Midwest) but it's still a very real expense. They (almost) all have health insurance, several contribute to IRAs, have reliable transportation (cars) and most have worked here for years. I'd say you are pretty clueless about what can be accomplished on $30,000 per year. Comfy? No. But it's not poverty either. I've actually been below the poverty line in my lifetime so I know the difference first hand.
(and yes I'd pay them more if it were possible to do so and still make any profit)
Wait a minute, increased prices? I thought Walmart had become instantly unprofitable from the wage hike because they didn't increase prices?
Don't be daft. Of course Walmart would increase prices if the minimum wage were increased just like everyone else. If they had to increase wages 50% UNILATERALLY they would instantly be unprofitable because they couldn't raise prices in that instance. The effect of big minimum wage increase would be less direct but no less economically damaging however. See below.
Increase burden (overhead) costs? Do they need to upgrade their payroll computers to crunch bigger numbers?
Increase wages = increase payroll tax burden, increased benefits costs and increased insurance costs. If you pay an employee more you will incur a larger burden cost for non-wage expenses. For instance unemployment insurance, disability insurance, etc are all based on the wages of the employee. Companies incur very real tax burdens that the employees don't usually see because the company pays for them. Typically the burden rate for most companies is somewhere between 30-50% on top of their salary/wages for each employee. For my company the direct labor burden rate hovers around 42%. We pay our assembly workers a wage (call it $10 to keep the math simple) and then we have to add 42% of that on top to get to the real cost of their employment. This accounts for tax, IRA/401K contributions/matches, insurance, plus a host of other costs most people never really consider.
Your own math seems to set 7.5% as an upper bound, though. 7.5% higher prices for 50% higher wages seems like a fair trade to me. Would you disagree?
7.5% isn't a bound of any kind - merely an illustrative simplistic example that the real number is a LOT higher than 1.1%.
It's much more complicated than you are making it out to be. By raising the minimum wage you are increasing costs for all domestic manufacturers (and there are LOTS). This effectively is a subsidy to overseas (read China) manufacturers who do not have wage supports at the expense of domestic ones who do. Manufacturers in the US would have to either lose business or in many cases simply shut down. So to prop up Walmart associates wages you are doing so at the expense of US manufacturing workers. Since they shop at Walmart too that is revenue that Walmart isn't going to get AND you are costing people their entire paycheck to raise someone else's by 50%. Did you think the money would come with no consequence?
I could also talk about the almost certain inflation increases, increased unemployment claims, the short versus long term effects, the supply chain effects and lots more. It's NOT simply that everyone is magically better off with no downside anywhere.
Of course you conveniently overlook the fact that (arithmetic) "average" is a relatively meaningless term in this context, median would be far more relevant.
You can run the same arithmetic using federal minimum wage and you'll find the logic of it does not change at all.
Besides which, even if we assume a 50% increase in the minimum wage translated to a 50% increase in total wages across the board, that still translates to only a 7.5% increase in costs. Increase prices by 7.5% and your profit margins remain the same, (and absolute profits increase, assuming volume remains constant)
You are ignoring all sorts of downstream issues. Let's assume that we increase minimum wage by 50% and that Walmart and others are able to pass the entire 7.5% cost increase on to their customers. In reality that wouldn't be possible but let's ignore that for now.
The cost of labor doesn't just increase for Walmart, it increases for the companies making the products Walmart buys from - which contrary to popular opinion is not just in China. Walmart buys a lot of domestically produced product too. That means that you essentially are providing a subsidy to overseas suppliers who do not have to share in the wage increases. So this means Walmart now has to source MORE products from outside the US and domestic manufacturers lose big. So even if Walmart doesn't have to lay off one worker by some miracle (which wouldn't happen), you lose a ton of jobs in US manufacturing - which still accounts for about 15% of employment in the US.
You also have to account for inflation. Increase wages by 50% and inflation is almost certain to increase. In terms of real purchasing power any increase you make is likely to be eaten way by inflation in short order. You also claim that Walmart's profit margins would increase which demonstrably wouldn't be true. Walmart associates might be able to buy more but the gains would be given back by the manufacturing employees that are now out of work. It's not like you can magically waive a minimum wage wand and everyone benefits with no consequences. Minimum wage laws serve a useful and important purpose but they aren't consequence free.
Absolute fail. You logic assumes that EVERYONE at Walmart is making minimum wage.
I used the exact weighted average wage at walmart which accounts for all associates. You seem to have missed the entire point which was that the effect of a minimum wage hike of 50% is FAR greater than a 1.1% increase in prices. You can go to the effort of taking out management pay and it doesn't affect my point at all. Walmart CANNOT afford to increase the wages of everyone making minimum wages by 50%. They would become instantly unprofitable by doing so. Even if we raise minimum wages for all walmart's competitors, then inflation takes effect and we end up right back in the same position.
He said 1.1% price increases. You're talking about profit.
Increase prices affects profit. They don't exist in a vaccuum. It wouldn't be a 1.1% price increase either. Not even close. Wages account for around 15% of Walmart's costs. Increase wages by 50% and you have an increase in cost of at minimum 7.5%. There is absolutely no way Walmart is going to eat that cost because their profit would vanish. They would have to pass on most of the price increase which simple math will tell you is greater than 1.1%. And if you think a 6-7% increase in prices is not a big deal then you really don't understand finance. That is close to double Walmart's entire profit last year. Their net profit margin is around 3%.
That's ignoring the fact that you wouldn't give everyone a 50% wage increase.
No but the VAST majority of the workers are low paid associates. The point is that the amount walmart would have to increase prices is FAR more than 1.1%
Ordinarily. But Walmart is the 900-lb gorilla. It's more like their competitors have to drop expenses to compete with Walmart.
Not that much. Walmart is the price leader but the margin of their lead isn't huge. Target and several others are pretty close and it wouldn't take much to make Walmart's prices higher than some of their biggest competitors.
Even if prices end up increasing by 10% but people's income increases by 20% then those people will be able to afford more items (and useful ones, like food and clothing)
And how exactly do you propose to ensure that people's income increases by more than prices? It's entirely possible for prices to increase 20% and income to go up only 10%. Inflation is significantly independent of whatever arbitrary wage level you desire. You can raise wages all you want but prices can just as easily rise faster than wages as they can slower.
A 5% increase in the minimum wage could easily be 20% increase in costs.
I'm an accountant and that is pretty much nonsense. A 5% increase in wages cannot result in a >5% increase in costs. In the real world this is true even factoring in overhead because wages typically are significantly less than 100% of total cost. It would be correct to say that a 5% increase in wages could result in a 20% (or more) decrease in profit - that is certainly possible, particularly in a low margin business.
Raising Walmart's minimum by ~50% would result in 1.1% price increases
Which is complete bullshit if you actually understand accounting. (Disclosure - I am a cost accountant in my day job) You'll note that the article you linked to has no actual analysis attached. If you actually look at Walmart's financial statements and information about their financials you would find that Walmart has around 2.2 million employees with an average unburdened wage of $12.83. That means they pay around $55 Billion in wages each year which amounts to around 15% of their costs. That means that if you increase wages by 50% you would be adding $27.5 Billion in cost to the company each year which is significantly greater than the 2014 Net profit. Increasing wages by 50% would make Walmart instantly unprofitable.
I'm not even counting the cost of lost sales from the increased prices or the increased burden (overhead) costs that come with paying higher wages. So no, the effect would be FAR greater than 1.1%. You might want to actually check your sources instead of just accepting uninformed (or disingenuous) assertions at face value. I don't have any problem with increasing the minimum wage but don't be stupid about what the impact might be.
$15 per hour is barely a livable wage currently; there's no way it will be in 2021.
$15/hour is approximately $30,000 per year. If you can't figure out how to live on $30,000 per year then you are utterly clueless and/or spoiled. No it won't be a posh lifestyle but it's certainly enough to get by and it will be in 6.5 years too baring economic catastrophe.
Google has a payment system up and running so why can't they make a competitor?
Because Google is an advertising company, eBay's profit margins are half of Google's, and Google has no realistic chance at taking over eBay's business anyway short of buying them outright. EBay is a great example of the power of the networking effect. They aren't particularly good at technology but they have the network effect working for them big time. It's the place with the most sellers and the most buyers so it is REALLY hard to displace them because anywhere else you aren't as likely to get a sale. Amazon (sorta) tried. Google (sorta) tried. There are plenty of other auction sites but the only thing that is likely to displace eBay is screw ups by eBay.
Ebay ceased to answer his emails, after writing that they considered it a mostly harmless error. Micheal E. sent Golem.de a PoC demonstrating that the error that has not yet been fixed.
I used to make my living selling stuff on eBay some years ago. This sounds like par for the course when it comes to eBay's coding competence. We developed some custom software to handle our listings and other activities and to say eBay's code was poor was a gross understatement. Their security procedures were haphazard and arbitrary and they didn't seem to care much. Maybe they've gotten better in the last 7 years but based on what I'm reading lately it seems not so much.
So, we are to believe that the electric variant costs $46,650. I can only believe that must include a huge amount for the sunk costs - designing the electric car, rather than each electric car being $30k more expensive than the gas equivalent.
(Disclosure - I am a cost accountant)
Wouldn't be surprising actually. The powertrain is completely different than the gas powered car and there are non-trivial engineering, tooling, and other fixed production costs that have to be amortized across lots of units if you are going to sell at a relatively low price. Plus I imagine the powertrain is not produced in big enough volumes to realize real economies of scale so the unit costs I would expect to be fairly high. Given the state of the art in electric vehicles I really don't see an electric vehicle being significantly profitable at less than $50,000 right now. There simply aren't enough of them out there to drive the unit costs down. I expect that number to fall over time but it will require investment by companies and maybe some government subsidies here and there.
On the other hand, enough with the whining and make a car that is worth what it costs to manufacture. Tesla makes a genuinely good car and sells it for a price that should bring a profit (eventually). The Fiat 500e is rather pathetic by comparison. It's a little runabout with a short range rather than a serious attempt to build an electric car. Regulations are not to blame for their inability to make a profit with an electric car. Their lack of engineering prowess and lack of commitment to the technology is why they are where they are.
It's a nice product, but it isn't obviously cheaper than each of its uses separately, and it's not going to be the best tablet, the best laptop, or the best desktop.
I could make the same argument about my smartphone. It's not the best phone, not the best camera, not the best tablet computer and not the best PDA. But it's good enough at all of those that I don't need a separate phone, tablet, camera or PDA. Nothing wrong with using best of breed gear if you really need a top notch laptop but multi-function devices can be really useful without being the best at a specific task.
Why? Their stock price has barely budged in the last 10 years and the dividend yield is about 2.5% which is pathetic given how much cash the company throws off. It's had a little run up in the last 12 months but if I were a MSFT shareholder, I'd be pissed.
But as a potential customer I too prefer companies that don't feel the need to censor their own employees from talking about the products they make.
That would be nice if employees always made accurate and fully informed comments that would be perceived correctly by all customers, media and stakeholders with no ulterior motive or ax to grind on the part of anyone. The real world however doesn't work that way. Even the most accurate and well intentioned statements can and will be used against the company. Customers are not always honest, the media is always looking for juicy stories regardless of whether they are true or not, ambulance chasers are always looking to extort money from a lawsuit, and employees sometimes are looking to make the company look bad whether they deserve it or not.
A lawyer wouldn't agree that companies trying to cover up their failings are shit?
Has nothing to do with lawyers covering anything up. While that does happen of course, there are plenty of problems that can be caused by employees talking to outsiders that have nothing to do with any illegal activity. The perception of wrongdoing, even when the actions are entirely appropriate, can cost companies large sums of money in defending frivolous lawsuits, brand tarnishing, lost sales, etc.
I think you're trying to say that no lawyer would want engineers saying anything to anybody.
Generally speaking that is correct though I wouldn't put too fine a point on it. Engineers (and lawyers) are generally NOT authorized to speak on the behalf of the company for some very sane reasons. That's not to say they cannot or should not every speak on the company's behalf when appropriate (or blow whistles when needed) but any lawyer who is doing their job is going to by default prefer that engineers not say more to outsiders than necessary. There is a sanity to that viewpoint even if it can be overdone.
There are also very good reasons to let the engineers speak freely.
While there are circumstances where letting engineers speak freely is fine, once product liability comes into the picture companies HAVE to be very careful or they are very likely to find themselves at the pointy end of some very expensive lawsuits. To not take some reasonable precautions regarding who can and should speak to people outside the company is irresponsible given the world we live in. Even small companies get sued all the time for all sorts of ridiculous reasons. That's not to say that engineers should be muzzled or anything - just that some reasonable care needs to be exercised.
Un-mingling the electrons in the grid graph edges wouldn't change the sources and sinks.
Quite correct and exactly my point.
Unfortunately it does create the potential problem of being unable to verify the sources meaning the power company could (theoretically) be lying to raise profits. Let's say hypothetically that the wind turbines they are pulling from can generate 100MW (made up nice round number) and the trains need 200MW (again a made up number) to operate. The power company could just say the wind turbines can generate 200MW (who's going to check?) and make up the difference by buying/generating the power from other cheaper sources but allowing them to bill more. Only way to be sure this isn't happening is to audit them.
Slashdot Mirror
Heard this on NPR, at one point a company representative said something akin to "the only test of if the company changes are enough is if this happens again". In other words, "just wait, if we don't kill a bunch of people again everything worked out!".
Not to defend GM when they don't deserve it (they don't) but how else will you really, truly know for certain if the changes worked? Just practically speaking the only way to really know if certain types of changes are effective in the real world is to try it in the real world. You can plan and evaluate until the cows come home but sooner or later you have to try the solution out for real. Yes it's scary but sometimes there aren't any alternatives.
If he was a licensed PE he had a professional and legal obligation to intervene with the switch, regardless of how he felt about it. If he wasn't a PE, then whomever the PE was that was managing him and approving his designs is to blame.
In automotive engineering PEs are a rarity. There is no requirement whatsoever that a PE be involved or that one signs off on any designs. You find PEs in civil engineering and some aerospace and a few other fields but most engineering does not require such a certification. There would be a production part approval and there would be an engineer of some sort who would be responsible for the design and production. Most parts in US automotive production require a PPAP document to be completed for both design and production processes. It's usually a pointless waste of time but there is a formality to the process and it does assign responsibilities.
Because the old GM is gone. The shareholders and management switched. It's a new company with the same name and it doesn't deserve to be liable for the past company.
"Doesn't deserve"? Gotta disagree with you there. Sure the company technically is incorporated as a "new" company and some (but not even close to all) of the management has changed but fundamentally it is still the same company. You are giving them a pass based on some legal technicalities which they do not deserve. In all practical terms it is the same company, selling the same products, under the same name, with mostly the same employees and the same facilities.
I run a company that supplies parts to GM. (we're a Tier 3 supplier) I honestly doubt there was much if any cover up. Frankly in my experience GM is too incompetent for that. I see their engineers do stuff all the time that is borderline retarded and the company is so large it's hard to even find a person responsible for a specific issue, much less hold them accountable. While I can't say for certain either way, I tend to think the cause of this fiasco is more structural than criminal. I think this is probably a case of incompetence of such a degree that it appears as malfeasance.
I would go a step further, in that the SEC was completely complacent in the whole Banking Investment fraud that led up to the collapse of the economy.
If you want to blame anyone, blame Congress. The SEC is badly underfunded and that is entirely the fault of Congress. I won't get into the politics of why but you can probably guess the various political motives involved. The SEC simply doesn't have the funding or the manpower to oversee what they've been charged with managing adequately.
Police don't necessarily prevent murder, but they are there to clean up the mess.
Go live somewhere were there aren't any police (like Somalia) and let me know how that works out for you. I'm sure you'll live a long an prosperous life.
SEC isn't just an organisation that gives a stamp of approval to well run investment schemes. They actively stamp out any that don't register with them and report to them. That makes the entire economy very vulnerable to poor decision making by a mere handful of people.
No, what it does is help keep crooks from putting forth "investments" that really are just frauds. It's the same reason we require drugs to get FDA approval before being sold to the public.
It also can seriously hinder innovation
You REALLY don't want fast paced financial "innovation". That was a huge part of how we got into the big recession in 2008-9. A lot of "financial innovation" is really fraud with a clever name.
If the SEC lost their enforcement powers
The SEC has their enforcement power for some extremely good reasons. There needs to be a cop on the beat.
One minute you claim that a 50% wage hike would cause Walmart to be unprofitable, and the next you claim that they would increase prices.
50% UNILATERAL wage hikes. UNILATERAL. Do you understand what that word means? Walmart alone = Unilateral. Minimum Wage increase = everyone raises prices. Unilateral = no profit.
Regarding payroll taxes, you're oversimplifying.
Of course I am because explaining the whole thing would require writing a freakin' novel.
But that's my point. 7.5% isn't a "LOT" higher.
BULLSHIT 7.5% isn't a lot higher. That is HUGE in an industry where profit margins are low single digits.
It's a lot less than the 50% growth in wages that we're talking about.
Only if you don't consider the entire economy. You are simply robbing Peter to pay Paul. You increase service sector wages and will cost manufacturing jobs. Some benefit, others don't.
1) Tarriffs
Which are a stupid idea. Tariffs on what? Your plan is to make everything more expensive? Tariffs raise prices for everyone to benefit a smaller group. Tariffs on steel make every car more expensive. Want to create inflation? Go ahead and start a trade war and enjoy the resulting recession.
2) The domestic service/retail industry dwarfs the domestic manufacturing industry.
The US manufacturing sector accounts for over $3 Trillion annually and has a multiplier effect beyond that larger than any other sector. The only country that has a manufacturing sector even close in size is China. Furthermore just because much of the economy comes from another sector doesn't mean it is a good idea to kill US manufacturing.
3) The money comes with consequences, and on the whole, it's still a positive.
Perhaps but you've hardly proven that. And bear in mind that I actually support raising the minimum wage. But if you raise it 50% overnight, my company will be out of business tomorrow and we're hardly the only ones. There is no way we could absorb a hit like that. I think the minimum wage should be raised some, indexed to inflation and to the poverty rate with allowances for exceptional economic conditions (like a big recession).
$30k/year in NYC:
There is a big world outside of NYC. Try it sometime.
your ignorance of other (read: more expensive) corners of the country is funny
And your sense of entitlement isn't funny at all. Here's a crazy notion. Move somewhere less expensive until you can afford to live in the expensive location. Nothing is forcing you to remain in NYC if you can't afford it. I went to school not far from NYC and you know what? I live in a place which costs 1/4 as much for housing because spending extra money just to live in a dense city when I can't afford it is stupid.
It's truly sad how many of this sort of ignorant comments a story like this brings out.
Funny, I'd say the same thing about your comments.
If you're (1) a single person (2) with no kids (3) in good health (4) with no dependents (5) in an area where rents and cost of living aren't outrageous, yeah, it's almost "certainly enough to get by.
I have a staff full of people who make $20,000-30,000 a year working full time, most of whom have kids and several of whom are in not the best health. The cost of housing isn't outrageous where we live (in the Midwest) but it's still a very real expense. They (almost) all have health insurance, several contribute to IRAs, have reliable transportation (cars) and most have worked here for years. I'd say you are pretty clueless about what can be accomplished on $30,000 per year. Comfy? No. But it's not poverty either. I've actually been below the poverty line in my lifetime so I know the difference first hand.
(and yes I'd pay them more if it were possible to do so and still make any profit)
Wait a minute, increased prices? I thought Walmart had become instantly unprofitable from the wage hike because they didn't increase prices?
Don't be daft. Of course Walmart would increase prices if the minimum wage were increased just like everyone else. If they had to increase wages 50% UNILATERALLY they would instantly be unprofitable because they couldn't raise prices in that instance. The effect of big minimum wage increase would be less direct but no less economically damaging however. See below.
Increase burden (overhead) costs? Do they need to upgrade their payroll computers to crunch bigger numbers?
Increase wages = increase payroll tax burden, increased benefits costs and increased insurance costs. If you pay an employee more you will incur a larger burden cost for non-wage expenses. For instance unemployment insurance, disability insurance, etc are all based on the wages of the employee. Companies incur very real tax burdens that the employees don't usually see because the company pays for them. Typically the burden rate for most companies is somewhere between 30-50% on top of their salary/wages for each employee. For my company the direct labor burden rate hovers around 42%. We pay our assembly workers a wage (call it $10 to keep the math simple) and then we have to add 42% of that on top to get to the real cost of their employment. This accounts for tax, IRA/401K contributions/matches, insurance, plus a host of other costs most people never really consider.
Your own math seems to set 7.5% as an upper bound, though. 7.5% higher prices for 50% higher wages seems like a fair trade to me. Would you disagree?
7.5% isn't a bound of any kind - merely an illustrative simplistic example that the real number is a LOT higher than 1.1%.
It's much more complicated than you are making it out to be. By raising the minimum wage you are increasing costs for all domestic manufacturers (and there are LOTS). This effectively is a subsidy to overseas (read China) manufacturers who do not have wage supports at the expense of domestic ones who do. Manufacturers in the US would have to either lose business or in many cases simply shut down. So to prop up Walmart associates wages you are doing so at the expense of US manufacturing workers. Since they shop at Walmart too that is revenue that Walmart isn't going to get AND you are costing people their entire paycheck to raise someone else's by 50%. Did you think the money would come with no consequence?
I could also talk about the almost certain inflation increases, increased unemployment claims, the short versus long term effects, the supply chain effects and lots more. It's NOT simply that everyone is magically better off with no downside anywhere.
Of course you conveniently overlook the fact that (arithmetic) "average" is a relatively meaningless term in this context, median would be far more relevant.
You can run the same arithmetic using federal minimum wage and you'll find the logic of it does not change at all.
Besides which, even if we assume a 50% increase in the minimum wage translated to a 50% increase in total wages across the board, that still translates to only a 7.5% increase in costs. Increase prices by 7.5% and your profit margins remain the same, (and absolute profits increase, assuming volume remains constant)
You are ignoring all sorts of downstream issues. Let's assume that we increase minimum wage by 50% and that Walmart and others are able to pass the entire 7.5% cost increase on to their customers. In reality that wouldn't be possible but let's ignore that for now.
The cost of labor doesn't just increase for Walmart, it increases for the companies making the products Walmart buys from - which contrary to popular opinion is not just in China. Walmart buys a lot of domestically produced product too. That means that you essentially are providing a subsidy to overseas suppliers who do not have to share in the wage increases. So this means Walmart now has to source MORE products from outside the US and domestic manufacturers lose big. So even if Walmart doesn't have to lay off one worker by some miracle (which wouldn't happen), you lose a ton of jobs in US manufacturing - which still accounts for about 15% of employment in the US.
You also have to account for inflation. Increase wages by 50% and inflation is almost certain to increase. In terms of real purchasing power any increase you make is likely to be eaten way by inflation in short order. You also claim that Walmart's profit margins would increase which demonstrably wouldn't be true. Walmart associates might be able to buy more but the gains would be given back by the manufacturing employees that are now out of work. It's not like you can magically waive a minimum wage wand and everyone benefits with no consequences. Minimum wage laws serve a useful and important purpose but they aren't consequence free.
Absolute fail. You logic assumes that EVERYONE at Walmart is making minimum wage.
I used the exact weighted average wage at walmart which accounts for all associates. You seem to have missed the entire point which was that the effect of a minimum wage hike of 50% is FAR greater than a 1.1% increase in prices. You can go to the effort of taking out management pay and it doesn't affect my point at all. Walmart CANNOT afford to increase the wages of everyone making minimum wages by 50%. They would become instantly unprofitable by doing so. Even if we raise minimum wages for all walmart's competitors, then inflation takes effect and we end up right back in the same position.
He said 1.1% price increases. You're talking about profit.
Increase prices affects profit. They don't exist in a vaccuum. It wouldn't be a 1.1% price increase either. Not even close. Wages account for around 15% of Walmart's costs. Increase wages by 50% and you have an increase in cost of at minimum 7.5%. There is absolutely no way Walmart is going to eat that cost because their profit would vanish. They would have to pass on most of the price increase which simple math will tell you is greater than 1.1%. And if you think a 6-7% increase in prices is not a big deal then you really don't understand finance. That is close to double Walmart's entire profit last year. Their net profit margin is around 3%.
That's ignoring the fact that you wouldn't give everyone a 50% wage increase.
No but the VAST majority of the workers are low paid associates. The point is that the amount walmart would have to increase prices is FAR more than 1.1%
Ordinarily. But Walmart is the 900-lb gorilla. It's more like their competitors have to drop expenses to compete with Walmart.
Not that much. Walmart is the price leader but the margin of their lead isn't huge. Target and several others are pretty close and it wouldn't take much to make Walmart's prices higher than some of their biggest competitors.
Even if prices end up increasing by 10% but people's income increases by 20% then those people will be able to afford more items (and useful ones, like food and clothing)
And how exactly do you propose to ensure that people's income increases by more than prices? It's entirely possible for prices to increase 20% and income to go up only 10%. Inflation is significantly independent of whatever arbitrary wage level you desire. You can raise wages all you want but prices can just as easily rise faster than wages as they can slower.
A 5% increase in the minimum wage could easily be 20% increase in costs.
I'm an accountant and that is pretty much nonsense. A 5% increase in wages cannot result in a >5% increase in costs. In the real world this is true even factoring in overhead because wages typically are significantly less than 100% of total cost. It would be correct to say that a 5% increase in wages could result in a 20% (or more) decrease in profit - that is certainly possible, particularly in a low margin business.
Raising Walmart's minimum by ~50% would result in 1.1% price increases
Which is complete bullshit if you actually understand accounting. (Disclosure - I am a cost accountant in my day job) You'll note that the article you linked to has no actual analysis attached. If you actually look at Walmart's financial statements and information about their financials you would find that Walmart has around 2.2 million employees with an average unburdened wage of $12.83. That means they pay around $55 Billion in wages each year which amounts to around 15% of their costs. That means that if you increase wages by 50% you would be adding $27.5 Billion in cost to the company each year which is significantly greater than the 2014 Net profit. Increasing wages by 50% would make Walmart instantly unprofitable.
I'm not even counting the cost of lost sales from the increased prices or the increased burden (overhead) costs that come with paying higher wages. So no, the effect would be FAR greater than 1.1%. You might want to actually check your sources instead of just accepting uninformed (or disingenuous) assertions at face value. I don't have any problem with increasing the minimum wage but don't be stupid about what the impact might be.
$15 per hour is barely a livable wage currently; there's no way it will be in 2021.
$15/hour is approximately $30,000 per year. If you can't figure out how to live on $30,000 per year then you are utterly clueless and/or spoiled. No it won't be a posh lifestyle but it's certainly enough to get by and it will be in 6.5 years too baring economic catastrophe.
Google has a payment system up and running so why can't they make a competitor?
Because Google is an advertising company, eBay's profit margins are half of Google's, and Google has no realistic chance at taking over eBay's business anyway short of buying them outright. EBay is a great example of the power of the networking effect. They aren't particularly good at technology but they have the network effect working for them big time. It's the place with the most sellers and the most buyers so it is REALLY hard to displace them because anywhere else you aren't as likely to get a sale. Amazon (sorta) tried. Google (sorta) tried. There are plenty of other auction sites but the only thing that is likely to displace eBay is screw ups by eBay.
Ebay ceased to answer his emails, after writing that they considered it a mostly harmless error. Micheal E. sent Golem.de a PoC demonstrating that the error that has not yet been fixed.
I used to make my living selling stuff on eBay some years ago. This sounds like par for the course when it comes to eBay's coding competence. We developed some custom software to handle our listings and other activities and to say eBay's code was poor was a gross understatement. Their security procedures were haphazard and arbitrary and they didn't seem to care much. Maybe they've gotten better in the last 7 years but based on what I'm reading lately it seems not so much.
So, we are to believe that the electric variant costs $46,650. I can only believe that must include a huge amount for the sunk costs - designing the electric car, rather than each electric car being $30k more expensive than the gas equivalent.
(Disclosure - I am a cost accountant)
Wouldn't be surprising actually. The powertrain is completely different than the gas powered car and there are non-trivial engineering, tooling, and other fixed production costs that have to be amortized across lots of units if you are going to sell at a relatively low price. Plus I imagine the powertrain is not produced in big enough volumes to realize real economies of scale so the unit costs I would expect to be fairly high. Given the state of the art in electric vehicles I really don't see an electric vehicle being significantly profitable at less than $50,000 right now. There simply aren't enough of them out there to drive the unit costs down. I expect that number to fall over time but it will require investment by companies and maybe some government subsidies here and there.
On the other hand, enough with the whining and make a car that is worth what it costs to manufacture. Tesla makes a genuinely good car and sells it for a price that should bring a profit (eventually). The Fiat 500e is rather pathetic by comparison. It's a little runabout with a short range rather than a serious attempt to build an electric car. Regulations are not to blame for their inability to make a profit with an electric car. Their lack of engineering prowess and lack of commitment to the technology is why they are where they are.
It's a nice product, but it isn't obviously cheaper than each of its uses separately, and it's not going to be the best tablet, the best laptop, or the best desktop.
I could make the same argument about my smartphone. It's not the best phone, not the best camera, not the best tablet computer and not the best PDA. But it's good enough at all of those that I don't need a separate phone, tablet, camera or PDA. Nothing wrong with using best of breed gear if you really need a top notch laptop but multi-function devices can be really useful without being the best at a specific task.
Were I a Microsoft shareholder, I'd be happy.
Why? Their stock price has barely budged in the last 10 years and the dividend yield is about 2.5% which is pathetic given how much cash the company throws off. It's had a little run up in the last 12 months but if I were a MSFT shareholder, I'd be pissed.
But as a potential customer I too prefer companies that don't feel the need to censor their own employees from talking about the products they make.
That would be nice if employees always made accurate and fully informed comments that would be perceived correctly by all customers, media and stakeholders with no ulterior motive or ax to grind on the part of anyone. The real world however doesn't work that way. Even the most accurate and well intentioned statements can and will be used against the company. Customers are not always honest, the media is always looking for juicy stories regardless of whether they are true or not, ambulance chasers are always looking to extort money from a lawsuit, and employees sometimes are looking to make the company look bad whether they deserve it or not.
A lawyer wouldn't agree that companies trying to cover up their failings are shit?
Has nothing to do with lawyers covering anything up. While that does happen of course, there are plenty of problems that can be caused by employees talking to outsiders that have nothing to do with any illegal activity. The perception of wrongdoing, even when the actions are entirely appropriate, can cost companies large sums of money in defending frivolous lawsuits, brand tarnishing, lost sales, etc.
I think you're trying to say that no lawyer would want engineers saying anything to anybody.
Generally speaking that is correct though I wouldn't put too fine a point on it. Engineers (and lawyers) are generally NOT authorized to speak on the behalf of the company for some very sane reasons. That's not to say they cannot or should not every speak on the company's behalf when appropriate (or blow whistles when needed) but any lawyer who is doing their job is going to by default prefer that engineers not say more to outsiders than necessary. There is a sanity to that viewpoint even if it can be overdone.
There are also very good reasons to let the engineers speak freely.
While there are circumstances where letting engineers speak freely is fine, once product liability comes into the picture companies HAVE to be very careful or they are very likely to find themselves at the pointy end of some very expensive lawsuits. To not take some reasonable precautions regarding who can and should speak to people outside the company is irresponsible given the world we live in. Even small companies get sued all the time for all sorts of ridiculous reasons. That's not to say that engineers should be muzzled or anything - just that some reasonable care needs to be exercised.
Un-mingling the electrons in the grid graph edges wouldn't change the sources and sinks.
Quite correct and exactly my point.
Unfortunately it does create the potential problem of being unable to verify the sources meaning the power company could (theoretically) be lying to raise profits. Let's say hypothetically that the wind turbines they are pulling from can generate 100MW (made up nice round number) and the trains need 200MW (again a made up number) to operate. The power company could just say the wind turbines can generate 200MW (who's going to check?) and make up the difference by buying/generating the power from other cheaper sources but allowing them to bill more. Only way to be sure this isn't happening is to audit them.