Ah, another great post…

Yes, the folks at Cafe Hayek do it again. It’s another one about Walmart, but this one’s a thinker. Forget Walmart for a second and just think about the employees… It’s a great read, see it here Even if you hate Walmart, especially if you hate Walmart, give it a quick read, it’ll take all of 45 seconds. It involves the mental exercise of wondering what would happen if we put a tip jar at the registers of Walmart. To me, this is micro econ at its finest. Quick, pithy, easy to read, and thought provoking. Some of the comments on that post are worth reading too.


2 replies on “Ah, another great post…”

Because WalMart is vehemently against unions, they pay much less than other similar stores. Because they have lower expenses, they charge slightly less for goods than other stores. So people shop there instead, and the other stores go out of business. So there is no other place to work.

That article is very one sided.

There are only so many gas stations and fast food places. I don’t know what the recent union stuff has done to wages at Safeway, but I have a friend who was eligible for retirement by the time he was 30. With benefits. At 20 or so he was making $16/hour. Whether you think the job is worth it or not, you can’t dispute that Walmart doesn’t pay what used to be the industry standard.

How is it one sided? Who is forced to work there? Walmart pays what people are willing to work for, that is what sets the going rate for work. If you were going to hire someone to powerwash your house and you got two quotes, one for $1500 and one for $850. If you were convinced that they’d both do the same quality job, who would you go with? If you thought the job could be done for $850, wouldn’t you think that the other one was overpriced? Remember, when a Walmart opens up, they are hiring people who want to work there. It isn’t up to walmart to support the workers of Safeway, they will have to compete with other workers. The guy making $15 an hour vs. the $7.50 at walmart had better bust his ass to make his salary worth it. Do the people that stock the shelves at safeway work twice as hard and get twice as much done as the ones at Walmart? Probably not. If someone is willing to do a similar job for half as much money, they certainly deserve a job much more than someone who thinks he “deserves” a salary twice as high.
The point of this article is that Wlamart is paying its employees what it needs to to get enough people to work there. WALMART DOES NOT SET THE PRICE OF LABOR! If it did, it would certainly hire everyone at the rock bottom minimum wage. They can’t do this, they have to raise the pay to the point where enough people want to work there. Walmart offers, people accept. That sets what that job is “worth” in salary terms.

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