Well this is awkward. Especially after President Trump sang Walmart’s praises in a Tweet just today. Here’s the details…
I recall a few years back when Walmart was saying they would raise their starting wages to $9 per hour.
Living in El Paso, Texas, this was a big deal.
Most retailers paid only the minimum wage ($7.25 in 2015 IIRC), and some retailers paid even less if they could get away paying cash to employees “under-the-table” (which many smaller, local corporations did).
I came to the logical conclusion, based on fundamental economic principles, that Walmart would either have to raise their prices, cut employees/hours, or close stores.
As the $9 starting wage became a reality, I noticed Walmart began axing employee hours.
In my personal experience, it would take a while to track down an employee of a specific department. I recall “Sporting Goods” and “Pets” being especially difficult departments to find assistance of any help beyond what I could have just figured out on my own.
The “Checkout” lanes took a hit too, and less you wanted to use “Self-checkout”, you would have to wait in line much longer than before, because there were less cashiers at any given moment.
I kid you not when I say that on several occasions I had to leave my ice-cream with the cashier because by the time my time came to “check-out”, said ice cream was about the consistency of a Slushy, only without the convenient spoon/straw and with the sticky drippings from the lid that reminded you that you we’re about to be one frozen hot mess.
Anecdotally, fundamental economic principles were proven correct yet again as I saw that Walmart both raised prices and cut hours. As for variation of store birth/death rates, Walmart has opened certain types (Neighborhood Markets), closed certain types (Discount Stores), and overall population has grown, so I guess we can call it a wash.
Fast Forward to today, January 11th, 2018, and Walmart is announcing that the retailer is raising the starting wages of their employees to $11 per hour.
Even President Trump was out there Tweeting Walmart’s decision with praise:
Great news, as a result of our TAX CUTS & JOBS ACT! pic.twitter.com/SLvhLxP3Jl
— Donald J. Trump (@realDonaldTrump) January 11, 2018
While it wasn’t stated in the Fox News coverage, that $1,000 “one-time bonus” is a maximum bonus, and only to employees who have been with Walmart for more than 20 years! Most employees will likely get much less than a grand although Walmart is not sharing it’s calculation methodology.
But it stands to reason, just like it did a few years back, that cut hours, price raises and store closures would need to be considered by the largest private employer in America in order for it to all work on paper.
Well, wouldn’t you know it, but thanks to the distorted economics post-Global Financial Crisis that make everything finance even faster and more exaggerated than ever, the store closures this time around are already coming in force, today, January 11, 2018.
That’s right. Store closures. Not announcements, but actual closures, and on the very same day Walmart says they are raising wages.
In fact, the store closures have come today with essentially zero warning and before the ink even dried on the $11/hr starting pay decision.
Here’s more from Zero Hedge:
Jessica Buckner, an audit team lead at a Sam’s Club location in Anchorage, told local TV station KTVA that all Alaska stores are closing as part of a larger downsizing across the U.S. “From what I heard, there’s over 260 stores that have been closed down,” she said according to CBS News.
The wholesale clubs’ official closure date is Jan. 26, Buckner said.
The closures also affect stores in New Jersey, upstate New York, Georgia, Illinois, Indiana, Ohio, Louisiana, North Carolina, Tennessee and Texas. In some locations, per social media, people showed up to work only to be told that their location was closing, with nearly no advance notice.
This exchange on Twitter seems to best sum-up what just went down:
After a thorough review of our existing portfolio, we’ve decided to close a series of clubs and better align our locations with our strategy. Closing clubs is never easy and we’re committed to working with impacted members and associates through this transition.
— Sam’s Club (@SamsClub) January 11, 2018
So while the news coming out of Walmart today has been nothing short of a roller-coaster ride, we are standing at the ready for President Trump to Tweet about the very bad thing Walmart just did after Walmart had just inspired so much Make America Great Again.
Until we get that Tweet, this video will have to suffice as a multimedia placeholder:
– Half Dollar