Could Wal-Mart Raise Wages?
By The two proposals differ a bit in the details, but they use roughly the same mechanism to reach the same goal, so we’ll go with Demos’s proposal (described in full here) for ease of explanation. Basically, the argument is this: Walmart throws off enough cash in profits each year that it could easily raise the wages of its workers by about 50%, so that they all made about $25K per year, which is what activists are seeking. Currently, the company just uses that cash for other purposes. Like what? Well, Demos points out that Walmart spent $7.6 billion last year buying back its own stock shares, a maneuver designed to buoy the stock price and dividend payments. From the report:
Walmart’s share buybacks further consolidated ownership of the company in the hands of the heirs to company founder Sam Walton, increasing the Walton family stake in the corporation to above 50 percent. In addition, the buybacks increased the value of ownership among the Waltons and the other remaining shareholders. Yet buybacks did nothing to boost Walmart’s productivity or bottom line and had no direct benefit for Walmart’s customers or frontline employees. Despite the lack of productive benefit, massive share buybacks at Walmart have become a regular occurrence: according to data compiled by Bloomberg, Walmart has bought back about $36 billion in stock in its four previous years, while in June 2013 announced a new $15 billion share repurchasing program at its annual shareholder meeting.
Oh, well, no then! Priorities must remain intact–making the Walton family EVEN WEALTHIER!
I do think if anyone still believes that super rich people reach a point where they think they are rich enough, they shouldn’t believe that.