Walmart tweet of the day

Walmart to close 154 stores. Yes! Think how much taxpayers will save by not subsidizing all those low wage workers.

That is from Alex, yes our Alex.  But a mere day ago, before the closing news, here was Bernie Sanders on Twitter:

I say to Walmart: Get off of welfare. Start paying your employees a living wage!



Instead of having state and national taxpayers subsidize you to surf the web and blog, why don't you leave your sinecure at George Mason and rely on the donations of your readers, like Steve Sailer?

subsidize you to surf the web and blog

Do you think that's all the professor does?

Of course not - Prof. Cowen is also the chairman and general director of the Mercatus Center. Which just happens to provide major, if not exclusive, support to MRU. Which Prof. Cowen appears on, by the way.

Prof. Cowen is also a Times columnist, but then, which libertarian policy institute director isn't one these days, hm?

The best estimate using open records (IRS filings and public information concerning Commonwealth of Virginia employees, along with a guesstimate at Amazon affiliate/author royalties) is that Prof. Cowen earns less than half of money through the support of taxpayers. Unless one wants to be picky about that tax free status that the Mercatus Center enjoys, of course. Not that any libertarian considers tax policy anything but a sign of the free market working, right?

You were a lousy employee. Get over it.

Ressentiment ain't pretty.

Society chooses to subsidize independent (hopefully) research. It can always choose to withdraw those subsidies, as many a researcher or professor or NASA employee knows. Do you think Steve Sailer doesn't write the stuff he does to satisfy his "donors"?

No, most people think Sailer is a sincere racist, and does not require payment to spread his beliefs.

Luckily for him, there is a market for such writing, and he has no problems being paid. But it is true - Sailer does not spread his racism at the behest of donors. One can accuse him of many things, but he does not seem merely a hired gun when it comes to rebranding racism to racialism, orhuman biodiversity, or whatever the latest term one uses to hide one's belief's from instant public recognition.

That's what makes Steve worth reading--he may ne wrong on a particular issue (I often disagree with him), but he's his own man--not just saying what ha advertisers or think tank employers or party want said.

The tweet was sarcastic, BTW.

What if James was being sarcastic?

Another Rahm Emmanuel voter getting slapped by reality.

Where's Bernie going to buy his clothes now?

Walmart should be like Amazon and employ robots

Amazon should pay its robots a living wage, so they can come to steal our jobs.

If we pay a living wage to our robots, other country's robots will steal their jobs.

If emperor Obama hadn't kept pushing this trade trade deal we wouldn't have to compete with cheap foreign robots.

Even worse foreign robots will swim the Rio Grande, coming with ever longer ladders once President Trump is in the White House, and immediately going on benefits and clogging up Emergency Wards.

But the robots who come here are the most hard-working, entrepreneurial robots. America was built by immigrant robots, and we need robot immigration to compensate for our low robot reproduction rates.
I am more worried about Syria. Our robot soldiers must fight robot terrorists there, so they do not need to fight them here.But we should at least welcome robot women and robot children who are fleeing the civil war.

Why drag Ted Cruz into this?

Welcoming robot refugees from Syria is one thing but the problem is that they will want to bring their robot families over with them. Given that robot production lines can run into the thousands, that is a lot of siblings. Pretty soon we will be over-run with feckless Levantine robots all selling humus. Before you know it America's own poor won't be able to afford beans.

I don't think this sub-thread really worked.

Just as long as they are White robots.

Apple is Waaaacist!

Mr. Sanders and others have evidently forgotten that Walmart gave its employees a massive wage increase in April 2015. The economic wizards at "thinkprogress" declared this policy a huge success as recently as June. Now, of course, all that is forgotten.

If they quickly raise their workers' wages they'll will be able to buy more stuff at Walmart and keep the stores open.

That only worked in the days before EITC and food stamps! Even the immigrants can shop at Wally World these days.

N.B. 102 or the 155 are "Express" stores, mostly in the South East. Walmart is abandoning the format.

This. I thought that Wal-Mart Express would beat the ubiquitous (and pricey) Walgreens stores that have a lock on Chicagoland, but apparently ubiquity is more important than I thought it was.

There were at least two problems with the smaller stores.

Walmart's warehouses and private fleet are built around delivering 53 ft truckload quantities to stores. It does not have a good way to deliver less than truckload quantities of nonperishable products to stores. Small stores lack the sales volume to justify frequent truckload deliveries and lack the storage space to go without frequent deliveries.

When people see the Walmart brand, they expect Walmart prices. Smaller urban stores are going to have a hard time turning a profit on the slim margins of the supercenter price without the supercenter volume and without the higher margin supercenter assortment.

There are almost certainly other reasons. Walmart is a very specialized organization, big stores in suburbs. It has difficulty operating well out side of its specialty.

And these were stores that they were pressured into opening because the neighborhoods were declared "underserved," "food deserts," and so on.

As to Walgreens stores, I have never understood who would buy anything there that couldn't be bought cheaper elsewhere -- the food, the small appliances, the toys, the health & beauty items, the diapers, etc. Are all these items bought by people waiting for prescriptions to be filled, or out of convenience?

You upstream commentators are either more knowledgeable than me, or pretending to be, by not asking the obvious question: how does the taxpayer subsidize Walmart? I thought Walmart agreed to pay taxes for internet sales, and last I read they don't get special tax breaks for setting up stores (I may be wrong).

Wal-Mart pays low wages, so many of their employees receive federal assistance. The joke, of course, is that when they lose their jobs, they will receive more federal assistance, not less.

Wouldn't you guess that over 80% of them move on to different jobs, many of them better? With 5% unemployment, it's unlikely that they just stop working.

If there are better jobs to be had, why do the workers wait till WalMart closes before switching to those jobs?

Real life is not an economic model and switching jobs is not a zero effort/ zero cost process. Inertia matters. Are you sure there's not a single better job out there for you right now? In addition, Wal Mart closings will create at least some demand for other retailers to expand or for new stores to open saga--jobs that don't exist right now.

Low wage employees getting help from government programs is an explicit goal of stuff like EITC--the goal is to avoid the situation where someone loses money by getting a job because of the loss of means-tested public assistance. If we ever go to a basic income instead of lots of means-tested programs, we'll do even better at eliminating those situations.

Ah, who knew that layoffs were just a way to nudge workers into prosperity...

You don't think some of these workers will go get better jobs?

What difference does it make?


Attempting to spin being laid off into something positive strains credulity. The better job, to the extent Walmart on your resume is impressive, would be obtained while currently working. Looking for work while unemployed puts one at a disadvantage.

It's only being unemployed long term that is a disadvantage. If you've only been out of work for a couple of weeks, it's nothing against you (plus you have more time for job hunting).

Let them eat cake!

Thanks Jan, not very often does someone make that old saw new again.

So the people who work there are damned either way basically? And we wonder why there's so much anger in this country.

You may be right, but those other retailers will now have a greater supply of labor to draw from. It would be surprising if a) the workers who chose Walmart were qualified to work at these competitors before they chose to work at Walmart and yet these competitors were better places to work for them and b) that these competitors will now, lower their standards if these workers had previously been under qualified, or raise the compensation they are offering in response to the removal of Walmart from the local employment market.

Are you assuming Walmart is the lowest rung on the ladder? It's not.

Actually, the direction of the effect is ambiguous. There's an increase in residual labor supply for WalMart competitors, but there's also an increase in residual consumer demand for these same firms. The net effect is not obviously positive or negative. You could see wages by these competitors increase or decrease as a result.

In particular, the effect could be positive if WalMart has relatively more bargaining power than the other firms, which I think is a reasonable reading of the market.

On the contrary, I was pointing out that it is unlikely that it is the bottom rung.

Fair point. I can't know which effect will be stronger. But there is evidence that Walmarts presence pushes wages up (

The effect is more likely to decrease wages than increase wages. Employees are discrete, stores have inefficient overhead, and 2 stores multiplies labor overhead compared to 1 store. Very simple example: Two stores require 2 managers, 2 cashiers, and x stockers. One store requires 1 manager, 1 cashier, and 2x stockers.

In fact, the stores closing are the poor performers, and mainly those in the "express" format of smaller stores. Walmart will still open at least 300 new superstores this year. Overall numbers are not great, but this is more a reflection of the weakness of the economy than of the business.

Is Walmart not counter-cyclical?

Yes, but that is 300 new stores worldwide. The number of closings worldwide is 269. The number of new US stores will be fewer than the 154 stores that are closing.

Walmart, like McDonalds (or for that matter Border books back in the day) tended to overbuild. The retrenchment is necessary.

The argument of your cited article seems to boil down to "it's bad to hire poor people, because they're eligible for welfare benefits."

Kmart pays about the same (maybe a little bit less) than Walmart. Most fast food places pay the same as McDonalds. Average hourly wages for these companies are available on

If none of these businesses hire people who aren't very good or experienced employees (there is a reason they haven't already left to get a better paid job elsewhere and it isn't loyalty to the company) and instead only hire the people who would compete for the job if the wages were much higher, then what you're left with is poorer people on even more welfare. Why is that a good goal?

Large corporations which assist their employees who are eligible for welfare understand the system do it because they want to help their employees have a better life, many (not all) of those poorer employees aren't very smart and can use guidance through bureaucratic mazes and the government offering the welfare apparently isn't doing a very good job of helping their "customers". The government entities involved should be thankful Walmart and McDonalds are putting resources into assisting them with their ostensible job and goals, i.e. helping poor people with welfare benefits, even if it is done out of a motive to improve their own worker's lives, rather than the lives of everyone else in general.

"Large corporations which assist their employees who are eligible for welfare understand the system do it because they want to help their employees have a better life, many (not all) of those poorer employees aren’t very smart and can use guidance through bureaucratic mazes" [snip]

A touching account, Tom. There's just one problem: its BS.

Tom, WM's strategy as a low cost retailer is to apply & leverage scale economies. Do you seriously expect us to believe that WM is going to involve its store managers in bespoke counselling/advice to convert its part time workforce to welfare queens?

They're still cutting in the stores:

Which means the store managers [who work 48-60 hrs/wk - without overtime] are going to have even LESS time for delivering the fanciful interventions you've articulated for us.

And the idea of creating some 1-800 number for part time 'associates' to call in Bentonville [for some HR wretch to navigate the individual welfare/assistance-to-the poor bureaucracies across 50 states] isn't going to fly-particulary after executive management just culled 450 FTE from Head Office

Finally, to even imagine that this corporation in particular would ever do anything to assist its employees is laughable:

UPSHOT: Thomas Sewell, you made this up. NEXT time, let's work on your plausibility.

You start with the idea that people who run Walmart are evil, then see everything through that lens.

For people who aren't predisposed to think every large corporation is inherently evil in everything they do, you haven't made any sort of argument.

Making an assertion isn't the same as making an argument.

Try this... are poor people eligible for welfare who are hired by Walmart better or worse off than poor people who aren't hired by Walmart and have to rely only on welfare benefits?

If your answer is worse off, then to have any credibility, you next need to explain why they agree to take the job with Walmart. Are they too dumb to know what's best for them, yet you know their lives better?

The sheer arrogance of the elitist anti-Walmart crowd in their ignorance is simply amazing.

Tom, my post, the gist of which you completely avoid addressing, concerned your ignorance, and the implausibility of your confected assertion.

Happy MLK Day!

Will be interesting to see which smaller retail establishments replace the Wal-Marts.

Maybe mom and pop stores are pushing Walmart out of business. By convincing everyone to cut their money in half.

Or maybe they've needed no convincing at all, as people who shop at Wal-Mart are not the ones who to tend to care about local or small businesses.

Cutting their money in half the mark.

Smaller retailers aren't going to beat Walmart on cost. If much higher minimum wages become a reality, the likelihood is that business will migrate toward warehouse clubs (Costco, Sams) that have leaner, simpler business models (with far fewer SKUs and employees) and also, of course, Amazon and other online retailers. In fact, expect mom-and-pop retail stores to be harder hit by increases in the minimum wage because one of the ways they compete now is by paying lower wages than Walmart to make up for lower efficiencies. The only exceptions may be mom-and-pop businesses so small that only family members work there (presumably, they can't be legally forced to earn enough profit to pay themselves minimum wage).

That migration already happened. Note that these stores closing are the Express versions of WM, not the super stores. The retailers that suck up the remaining demand will all be smaller businesses, because what company is bigger than WM.

Show me evidence that mom and pops pay lower retail wages. You must exclude management and central corporate employee pay because that is not the workers we are comparing.

Also, as far as employee welfare is concerned, one need not dislike Costco just because it is a warehouse chain. From everything I've seen, they do quite a good job taking care of their workers.

Yes, they do pay higher wages than Walmart and Target. So does Sam's club, I believe. But warehouse clubs manage this by having far fewer SKUs and far fewer employees per million dollars in sales. Megan Mcardle has written several pieces about the differences in the two kinds of business:

In my experience Mom & Pop stores will pay roughly the same for product from their wholesalers that you can purchase at Costco/Sams retail. For the average customer the advantages of massively scaled operations outweigh the "personal service" and honestly often chaotic mom & pop experience. Shopping local is a quaint luxury and status good in and of itself. You're better off working for Wal-Mart than competing with them, so are most customers.

That migration already happened.

Only in part -- there's still plenty of room left for warehouse clubs and online retails to grab a larger market share.

Show me evidence that mom and pops pay lower retail wages.

Here's one example -- both mechanics and salespeople at independent bike shops earn lower-than-Walmart wages:

Thank you for that note of reality, Slocum.

The lowest-paid job at Walmart offers both better pay and much better working conditions than the jobs I had at 21, 22, 23. Sometimes the absolute snottiness of the privileged left, like Ritholtz and like so many academics, is just a reflection of how insulated they are.

Dollar stores. As Walmart has gotten pricier (which is has, albeit not extremely so), the dollar stores have already stolen some of Walmart low income customer base.

Walmart succeeded in large part because of the economic decline of the American middle class: no longer able to afford the traditional retailers (e.g., Sears), the middle class shopped at Walmart. Now, Walmart is having a similar (but different) experience, a combination of the loss of customers to on-line sellers with lower marginal costs and better shopping "experiences" (no parking hassles, no lines) and the loss of customers to traditional retailers with higher prices but better shopping "experiences". Ironically, the closures are mostly the smaller, neighborhood stores Walmart recently opened that were intended to improve shopping "experiences" (as compared to the shopping "experiences in the big box regional stores) Another explanation is that Walmart is a mature business that has about reached its limit in growth. There is, however, a silver lining to the Walmart story: it's still a very profitable company. Walmart's chief competitor, on the other hand, isn't all that profitable, even as it experiences phenomenal growth. What happens to it when it reaches maturity and its growth slows to a crawl? What's the silver lining in that story?

Which is Walmart's chief competitor?

I know people who avoid Walmart out of principle. They shop Costco instead, because it provides low costs while paying higher wages. The thing is though, it employs many fewer. Who pays more in total wages?

There's two things here. One is total wages. WM pays more in total wages simply because it is a huge company. Another way to look at it would be revenue per employee.

I think the alternative you're implying would be more consistent with those people's principles would be to shop only at retailers with low revenue per employee, regardless of whether those jobs are good or well-paying?

Pretty much. Or as I say, just be fine with government supplements to low marginal product workers.

(I do believe enough in labor market efficiency to believe no one would work at Walmart if better was available. I believe Walmart is structured for and prefers low marginal product workers. And shoppers.)

lol! Yeah, people were happy spending more money at Sears and only switched to paying less at Walmart because they had less to spend. That makes perfect sense.

I am on the record as "being fine with" Walmart wages as a public-private partnership.

I am not sure conservatives or liberals have a higher ground. One would cut both public aid and the minimum wage, the other would break the low wage model (essentially "Costco not Walmart").

Alex's snark is fine, as long as he too is fine with the public supplement.

If you polled the 5% of US taxpayers who paid 90% of the taxes, you'd find overwhelming support for Wal*Mart.

Most of the opposition to them using "Taxpayer money" to subsidize cheap labor comes from people who account for very little "Taxpayer Money". I find this interesting.

How many are "for" Walmart but think we pay "too much" in food stamps?

Not as many as you imagine in your fevered dreams, surely, and no one involved in the real debate. Don't mention the people who think food stamps is the serious entitlement reform issue facing our society, and I won't mention your magical crystals, anti-vaccine allies.

I'm curious "how much taxpayers will save by not subsidizing all those low wage workers" relative to the revenue contributions of those 154 stores.

If those stores were failing, they weren't bringing in much if any additional profit for Wal-Mart to pay tax on. Of course, they were still doing some sales and employing people, so there was sales tax revenue and taxes on wages coming in. But the business those particular Wal-Mart locations were doing will be absorbed by other retailers--the locals still need to buy stuff. The sales taxes and taxes on earnings from these other retailers will fill the void left by Wal-Mart's exit.

It is likely that these existing local businesses and new retailers pay their workers more than Wal-Mat did, so per-employee taxes on wages would be on net higher. And if these people make more money, they are also using less government assistance. Unfortunately, it is unlikely the total number of local employees will not decline somewhat, because Wal-Mart was essentially subsidizing these failing stores by retaining more capacity than was needed. Which was not sustainable.

I realize this is a hell of a lot of speculation, but the assumptions don't seem totally unreasonable to me.

"not totally unreasonable" is a pretty high bar you've set for yourself.

Add in the continuing shift to on-line retail.

Walmart says that every US store being closed is within 10 miles of another Walmart.

Unlikely. They would be closing a lot more stores then. Just one Walmart is closing here in the Baltimore area-- yet I can think of others than are decidedly less than ten miles apart. (The store closing here is less than five miles from a Super-Walmart, and it's on land that is slated to be massively redeveloped by the UnderArmor Corporation)

This posting: leads to the possibility of a future economic study that would determine if the offspring of present-day Walmart workers are at an economic disadvantage. Of course the biggest difference in the two groups is that Walmart employees are there voluntarily, draftees were not.

It's pretty well-established that intergenerational mobility in the U.S. is not so high these days. The dispute is between conservative-libertarians like Charles Murray who think it is mostly because of genetics and assortative mating and liberals who think it is because of things like low-income people living in sub-standard school districts and not being able to provide a good enough early childhood environment for their offspring. Murray and the liberals might be able to find common ground on issues like breastfeeding and childhood exposure to lead, though.

Is this the same Alex who says we should be importing millions more cheap stoop labor?

Jan is giving Mulp a run for his money. That takes some effort.

Many comments assume another retailer will fill the space vacated by these Walmarts. Look around. There are many empty storefronts. I live an upper middle class city and there is a storefront that has been vacant since Rite Aid moved out more than a decade ago. The amount of commercial property coming on the market just keep increasing. In addition to the Walmart announcement, there was this earlier in the week:

Lots of Boom activity in my town. We shall see.

It's not necessarily that someone else will move into the shuttered stores (though someone might-- where I lived in St Pete there was a mega-church in an old Walmart building), but rather than the people shopping at Walmart will take their business somewhere. Maybe to a Walmart down the road. Maybe to dollar stores and discount grocers.

Never been to a Walmart Express. But the regular Walmart superstores seem to be declining in inventory organization and quality of product line below even the value level. Because of Amazon?

"But the regular Walmart superstores seem to be declining in inventory organization ..."

I've noticed they are also declining in cleanliness and are starting to resemble the K-Marts of the 1980's. In addition, with the introduction of Customer service lanes they reduced staffing on check out lanes. They still spend enough on building maintenance to keep their lights working correctly, though. It's clear that Walmart has been cutting the amount of money spent on store labor for years.

Most Walmarts still don't have automated checkouts, and they seem to be in no hurry to get them. There were two new Walmarts (super-centers) built in the suburbs of Baltimore in the last five years-- and neither put in auto-check lanes. It's hardly a universal trend.

Late to the party, but why is Walmart closing 269 stores (that's the number I see in other news accounts) out of a worldwide total of over 11,000 news? Or is the news the failure of Express stores (154 closures in the U.S).

Alex isn't thinking straight if he believes this is unambiguously good news. These Walmart express that are closing are in small towns that are over 30 minutes from the nearest Wal-Mart. The business will either spread to dollar stores or the citizens will just drive to bigger Wal-Marts that are further away. Walmart cuts their losses, but does our welfare budget really gain from a new batch of low-skilled unemployed?

This was all very surprising, the local one was doing excellent business.

ffs, he was joking

And of course, we never hear "Walmart, raise your prices ! and raise your wages!"

We do, though. "The high cost of low prices" for example. Often by the upper middle class that doesn't like or shop at Walmart much, but there are lots of people who would like Walmart to do exactly that.

A Wal-Mart Express is about the same size as an Aldi.

Aldi prices are no higher than those is a Wal-Mart Supercenter (perhaps lower).

If one assumes that Aldi runs its small, low-price stores profitably, why was Wal-Mart unable to do the same with its Express stores?

The idea that Walmart is subsidized when their employees get welfare seems obviously wrong to me and I assume that Bernie sees it as I do making him a conman. Perhaps I am wrong Bernie's bias is enough to keep him believing what he says.

I wonder if Bernie hires cooks gardeners and maids to work at his house, you know to provide an example of others to show how to create jobs paying a living wage. I bet that he could afford them.

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