Saturday, December 07, 2013

Walmart is guilty of more than poverty wages. The company reaches into the pockets of other company stockholders. Companies that have unions.

This is a Maytag washer. It is assembled by a company whom's employees are represented by a union. For the sake of example, this washer costs $200 to manufacture and sells from the factory with a one year warranty for $250. 

Retailers sell the washer to consumers somewhere between $350 to $450 depending on the area of the country and what the market will bear. The washer is warranted of all parts and maintenance for one year. But, since this is Maytag, their repair persons are very lonely.

So, the commercials speaks to the quality of the appliances by Maytag.

Walmart decides to sell Maytag washers so they contract the company and negotiate a contract for 50,000 washing machines because there are more than 4,000 stores in the USA. 

The price negotiated with Maytag for the washer is $220, but, Maytag reduces the warranty to 90 days after purchase.

What happened there? 

Walmart brought pressure to the CEO of Maytag because the sale is $11 million for 50,000 washing machines. $11 million to Walmart is nothing in operating costs. 

The obvious cost here is an insult to the free market in many ways. Walmart is undercutting nearly every other retail of the washer in the country, some are small, local stores operated by an owner/operator. Basically, they can't compete, EXCEPT, to over a full year warranty which because of the reputation of the washer is mute. If a consumer depending on the area of the country can walk into Walmart and pay $300 to $400 for the washer they will purchase it. 

But, forcing smaller stores and other chain stores to compete and quite possibly put them out of business isn't the only insult to the free market system. Stockholders are also receiving less dividends because of Walmart. That sale to Walmart robbed Maytag's treasury of $1.5 million dollars. 

The CEO would argue the sale actually made more money than if the sale wasn't made because the washers would be taking up warehouse space, so the transaction is a wash. The stockholders buy the assessment from the Maytag CEO.

It comes time for Maytag to negotiate their contract with the union representing their employees. During negotiates, the CEO's representative/lawyer points to the fact the companies income is falling because in order to be competitive they have had to sell large numbers of their appliances below their normal wholesale price. The union states the price was low when the company made poor decisions about it's marketability. It won't matter the protestations of the union, because the income of the company under their previous contract is on the table and that is what Maytag will use to demand fairness in negotiations. As a result, there are modest pay increases, benefits remain intact and no concessions on pensions.

Maytag goes on to produce quality appliances and has increased income as of 2012 of $4.7 million. The earnings are up compared to 2011. The modest gains in payroll translated into higher profits, the CEO gets a bonus and the stockholders are relieved at the increase in the value of their stock.

That is not an unrealistic scenario. Any merchandisers selling to Walmart will tell you that the company expects big reductions in their cost of products because it can buy in large lots. The sales are made that other competitors can't match. The OPPRESSION of the free market system with Walmart as the largest merchandiser in the world is causing hardship with labor and tax bases of countries. 

The Late President Mandela didn't have star quality, he left that up to his rugby players.

Evergreen: Nelson Mandela presents the Webb Ellis trophy to 1995 South Afica captain Francois Pineaar

He was however a living legend and a hero to all those touched by his life.

Apartheid was such a horrible reality of injustice and hatred it could not stand, but, without Nelson Mandela would South Africa yet be free?

Having him leave the prison was a watershed for the world. It was a time in South Africa when people realized how oppressed they were. This release validated the oppression and it's lifting.  

There is still work to do and I am confident it will be done. His work is still incomplete. The issue of economic inequity is a global problem. South Africa is not alone this time in their demands for a decent life, happiness and the promise of tomorrow.


Mourning the loss of a man (click here) who bridged South Africa's racial divide, many Africans hope their leaders today will be inspired by Nelson Mandela to heal another rift widening dangerously across the continent: the wealth gap.

"We need the next Mandela to fight for the poor," said Thomas Kozzih, 30, a community worker in Nairobi's Kibera slum - an expanse of metal shacks butting up against smart new flats that testify to Africa's new growth that has left many behind.

Nelson Mandela
1918 - Born in Transkei, South Africa
1944 - Joined African National Congress
1956 - Charged with treason, later acquitted
1962 - Convicted of sabotage and sentenced to 5 years
1964 - Sentenced to life in prison for plotting to overthrow the government
1990 - Released from prison
1991 - Elected president of ANC
1993 - Won Nobel Peace Prize
1994 - Elected president of South Africa
1999 - Decided not to seek a second term as president
2004 - Retired from public life
2007 - Formed The Elders group
2011 - Briefly hospitalized for a chest infection
2012 - Hospitalized again,this time for gallstones
2013 - Treated for a recurring lung infection, dies on Dec. 5
"We have to get a person who is not after his own riches, a common man. The poor are marginalized," he said echoing the sentiments of Africans long used to the politics of "Big Men" who have lived in luxury as their citizens scrabble to eat....
The message of economic inequality is not just that of the Late President Mandela, Martin Luther King, Jr. stated the same. It is one thing for a person, a group to complain about social injustice, it is quite something else for great leaders across the decades to connect to the same social injustice of the people they lead. This is not a minor problem. It is a sustained problem for many peoples in the world, including those marginalized in the USA. The complaint of a world left in poverty is valid and our great leaders are correct.

Walmart doesn't even belong on the same page as the Late President, but, I have a feeling he would nod at this.

Walmart's profit in the third quarter of 2013 was $3.7 billion. $3.7 billion in ONE quarter of 2013.

Below is a graph of the obscene growth of PROFITS of Walmart. One might notice how the profit margin ticked up during 2008 while most of Wall Street lost significant income.

Adam Shell
5:54 p.m. EST November 14, 2013

...In the fiscal third quarter, (click here) the Bentonville, Ark.-based retail giant posted net income of $3.7 billion up a modest 2.8% from the quarter a year ago. Earnings per share were $1.14, up 6.5%, and a penny better than expectations, according to Thomson Reuters....

A report in 2010 stated 10% of the American workforce or about 3.1 million people is employed by Walmart. Those employees provided obscene profits to Walmart. Walmart didn't do it themselves. Yet Walmart sees no moral obligation to employees to make their lives better rather than sending them to the local Social Services office. 

Walmart can do better in providing a living wage to their employees, it simply loves to corner 'the cheap' market and won't budge from their entrenched wealth.

Macy's or is it JC Penny is having trouble staying afloat, one might want to ask why. Walmart does more than reinforce poverty in the USA, it costs those working in retail to lose their jobs when other retailers can't compete. 

So the economic hardship of Walmart extends far beyond the poverty wages it pays, but, it's cost reaches into the USA Treasury and other large Wall Street retailers causing more Americans to enter into poverty, too. Isn't Walmart a great company? NOT !

The profits of Walmart allows it to undersell the items they market forcing other companies to compete. Other companies can't cut their prices to the rate Walmart can, thus losing their consumer base and losing a profit margin and quite possibly forcing those companies into bankruptcy. Walmart's goal whether it's CEO wants to admit it or not, is MONOPOLY, not simply competition. 

When is enough profit enough? Never? It has to own the world of retail? 

I feel no guilt in encouraging those receiving poverty wages to unionize and demand higher pay and better benefits. When Sears was on the lips of every American consumer, their employees had no trouble making a living in those stores.

Along with Reagan, existing members of Congress acted against the Late President Mandela and the people of South Africa.

By Igor Volsky and Zack Beauchamp
December 6, 2013

...The 1986 bill (click here) cut virtually “all U.S. economic ties with South Africa, requiring American companies to cease operating there within 180 days.” Lawmakers had to override Reagan’s veto. Sens. Thad Conrad, Orrin Hatch and Reps. Hal Rogers, Joe Barton, and Howard Coble all voted against imposing sanctions on the regime....
7 December 2013 
Last updated at 09:21 ET

It said the cortege (click here) will leave a morgue on Wednesday, Thursday and Friday morning to go to the Union Buildings where his body will lie in state.

Mourners are being encouraged to line the route.
Meanwhile, vigils for the former leader are continuing across South Africa.
Hundreds of mourners have gathered outside Mr Mandela's home in Johannesburg's northern suburb of Houghton where he died, and thousands of flowers and candles have been laid outside....

...On Saturday the government published further details of the 10-day state funeral, saying as many people as possible would be given the opportunity to pay their last respects....

...Sunday has been designated an official day of prayer and reflection and President Jacob Zuma urged South Africans to to go to stadiums, halls, churches, temples or synagogues...

There is no such thing as Economic Populism in the Democratic Party.

The use of Economic Populism as a descriptor of Income Inequality is a way to redefine "Income Inequality" and defeat it.

"Third Way" is the "W"rong way.

I am not familiar with the Third Way group and I don't care to be. If they are writing for the Wall Street Journal, they are writing for Murdoch. Questions?

The FACTS speak for themselves. There has been growing poverty. The working poor exists. The USA has a strong lag in economic growth because the 'wage labor' is poorly paid. That is a fact, there is no reason to discuss it further except to move an increase in the minimum wage further and insure the well being and growth of the unions.

Populism is not based in fact. It can be a legitimate movement and it can be benign, however, it is not based in fact to legitimize governing. Populism results in legislation that FAVORS a group of people able to bring it forward as a national priority. Where has that manifested? The Tea Party. Their ideology is based in a populist movement and cannot be validated in fact. The worst Populist message The Tea Party and the Republican Party have is the 'idea' that Wall Street needs to be unregulated to provide a growing economy. That is not only populist, it is a lie based in historical fact that goes back to the Great Depression.

Populism can put forward 'ideas' such as holidays or days of national significance such as Veteran's Day, but, as a way to structure economic policy is unrealistic to say the least. 

It is interesting Income Inequality is becoming an issue the Right Wing believes they have to create a deceptive campaign to prevent. They are scared it might actually become an election issue and even more afraid the movement will succeed. It should succeed. It is the right path for the USA.