I’ve argued this point before, but Walmart’s collapse today should be a case in point. Shares of the retail giant sunk nearly 10% on Tuesday.
Here’s a back of the envelope calculation:
Walmart has 2.3 million employees. Say they work an average of 35 hours a week, or 1820 hours a year. The $2 pay raise, announced in January from $9 to $11 applied to all of them would cost $8.372 billion per year.
That is roughly half of WMT’s pre-tax income during the past 12 months ($15.123 billion).
Of course, the pay raise doesn’t affect all employees, but the scale of the problem indicates how exposed labor-intensive, minimum-wage businesses are to even modest increases in pay.
walmart has cut services in their stores by doing away with cashiers. you ring up bag and pay your self now in stores.there are some cashiers left but the self serve is working so look for the closure of all cashiers. and merchandise stocking has been up graded by powered lift trucks and carts. it still has to be put on the self but in cases were they can .they have the supplier do it.as in soft drinks snacks etc.