Oso planning to go pro
Agree. Target has many problems that have nothing to do with minimum wage, bathroom policy or other political hot-button items.They had a major credit breach and mismanaged the response to it. They tried to go into Canada and totally botched it, losing billions of dollars before leaving the country with their tail between their legs. They were late to the grocery party, late to the Internet party and late to doing most things that can help a retailer survive (let alone thrive) in this current environment.Morningstar (a respected financial research center) says Wal-Mart has a "wide moat," meaning it has significant competitive economic advantages. Morningstar says Costco has a wide moat. They say Amazon has a wide moat. They say TJX (parent company to T.J. Maxx and Marshalls) has a "narrow" moat, meaning it has some competitive advantages but lacks some others.Target? Morningstar lists the moat as "None." None!And I agree with that, because there is absolutely no reason for any shopper to choose Target. What can you buy there that you can't buy elsewhere, usually less expensively? In the course of just a few years, Wal-Mart has refashioned itself to be America's No. 1 grocery chain. It also has made great strides with its presence in e-commerce. Target is woefully behind.According to financial analyst finviz.com, Target has grown earnings by only 1.4% annually the last 5 years and is expected to see earnings shrink by 3.3% annually the next 5 years.In other words, lots of problems.Not that anybody's asking, but I view this minimum wage hike as a shot worth taking. As chick said, at the very least it could entice good Wal-Mart employees to leave and join their team. Maybe customer service will improve and that will help bring in more shoppers (or at least retain the shoppers they have).The average Target employee still will be paid less than the average Costco employee, though. Costco not only pays better but it offers good benefits. As a result, it has the happiest, most loyal employees. As a result, it faces far less turnover, which is always costly for companies. And because most Costco employees like their jobs, they work harder and they give better service to customers, who in turn like shopping there. Costco customers are so loyal they pay just for the right to shop there!Remember those horrific Target earnings numbers? Well, Costco's earnings grew 10.1% annually the past 5 years and are expected to grow 10.5% annually the next 5 years.Treating their employees well, starting with an excellent wage, has not hurt Costco.
You're making an assumption that people are paid an amount equal to the value they provide. And, I'll note, the people who make that argument when it comes to low-wage workers never seem to have a problem with executive compensation that exceeds the value those workers provide.
The people who pay these executives must think they provide value. Who else would be more fit to make that decision?
If you make a higher wage mandatory, and force companies to pay more to a person than the value it is receiving in return, it certainly will.
Executive pay no matta. Macroeconomic policy that facilitates labor sharing in the successes of capital is far more important than how much 1040 income a handful of C-Suiters enjoy.
In the big picture, you're correct. Trimming some CEO pay isn't going to create the capital necessary to raise incomes for lower-wage workers across the board.But I still find it hypocritical that some of those most vehemently opposed to raising pay for low-income workers are the same people who have no problem with executive pay that in no way reflects the reality of their value to the company. The best rationalization they can come up with - as warriorchick did above - is a limp "well, somebody must think they're worth it."
Got a better idea? Last time people tried to impact executive pay they came up with this system which ties their pay to longish term performance...something I'd argue is currently fueling in large part the current bubble in the stock market.I'm not opposed to reigning in executive pay if someone can come up with a mechanism that actually does it.
For starters, I'd require publicly traded companies to form compensation committees made up of shareholders who are not executives in similar industries (and perhaps not executives anywhere). The compensation game is in part rigged because those making the decisions (board members who often are executives at other companies) have a vested and personal interest in maximizing executive compensation.Second, tie pay to a company's long-term and overall performance, such as including debt status and extending the time at which stock options can be sold, not just short-term measures like stock price.
And the real funny joke is that the time horizon for low wage jobs in the consumer industry is no more than 10 years. Cashiers won't be a thing 10 years from now, so moving their wage level from $11 to $15 now will have little impact on the long term valuation of the companies.However, the very positive thing is that over that same time horizon manufacturing will be moving back to the US at significant levels. It will be very automated manufacturing but it will bring a significant level of entry level jobs with it that IF we transform our educational system, those who previously would have gone the cashier route will now be able to go the manufacturing route.https://www.theatlantic.com/business/archive/2017/01/america-is-still-making-things/512282/https://venturebeat.com/2017/06/03/tech-and-the-renaissance-of-manufacturing-in-america/http://www.mckinsey.com/business-functions/operations/our-insights/the-future-of-manufacturing
Not so sure about that. My wife and I always use a cashier at the grocery store. Why self check and bag your groceries when a cashier will do that for you. I think cashiers are good customer service.
10 years from now you either won't be going to the store at all, or you won't need to use self check. Think RFID tags in products which get scanned as you walk out the door and linked to your account via your phone which automatically provides your preferred methodology of pay.
Some day not too far off into the future you won't have a choice because the self checks save the companies money.
Actually, some day not too far off just the opposite might be true. Some major chains (Albertson's, CVS, for example) are removing them either entirely or in part, and others (Costco, Trader Joe's) refuse to add them. While they do save on labor costs, companies are finding out that they add to repair costs, increase store thefts and are generally unpopular with customers.My guess is neither employee checkout or self-checkout will go away entirely anytime soon.
I have an acquaintance who brags about how he steals from grocery stores using their automated checkouts. He'll buy expensive vegetables and use the codes for far cheaper ones, claim to only have 4 bakery items in a bag when he has six, use expired coupons, etc. He doesn't call it "stealing," but I told him that's exactly what it is. His reaction: "They're a big-money company, I'm just an Average Joe trying to get by." I wonder how many "Average Joes" are doing stuff like this. I'm guessing it adds up to significant losses for the grocers.
not to worry how much it's costing the grocers-it's built into the price WE pay. if not for your "acquaintance" maybe some of the chit we buy wouldn't be so expensive-no biggie though as us above average joes can afford it, eyn'a?
We are in agreement, rocket. A rarity ... but it occasionally happens!
hey! see, we can all just get along-high 5-eyn'a nice game by your panthers by the way! what did cam have 40 gazillion fantasy points? shocked the ...crap outta the NFL- back on the soopa bowl wagon?
Part of Target's problem is that they've had significant turnover in leadership and culturally they are failing. My cousin has been a lifer at Target corporate in Minnie since we graduated in 2003. The corporate culture and strategy has changed significantly over the last 4-5 years which has detrimentally impacted the performance of the company. 3 years ago my cousin, who is in a very significant position there, said he would retire with Target and he couldn't imagine anywhere else. Just saw him in August and he's actively looking for a new job because he doesn't believe in their vision anymore.Part of the issue is that Target didn't try to differentiate it tried to compete. What I mean by that is it tried to copy competitors like Wal-Mart and beat them at their own game, instead of steering their own differentiated path.For the record, Wal-Mart is not winning because they have great customer service or are a great place to shop....they are winning because they figured out the game of playing with other peoples money the fastest and best. Their payment terms for goods received is astounding and means that the inventory on their shelf never has to be paid with "their money" so they are cash rich and can throw that weight around with procurement. Much like Amazon is not really a consumer goods company its a logistics company...Wal-Mart isn't a consumer goods company its a financial services company. And that's where Target has gone wrong (same with Kohl's etc) they think of themselves as consumer goods companies.