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Yelm risks city’s budget relying on Wal-Mart’s growth

The City of Yelm has been placing too much dependency on Wal-Mart for sales/tax revenue growth here, focusing on attracting multi-national corporations at a great loss to the foundation of this community – locally owned businesses, many of which have closed.

As an example, the City of Yelm approved Wal-Mart’s permit here based on a traffic mitigation plan that used a completed Yelm Bypass to be completed within 7 years of store opening, when the city KNEW Bypass funding would not be forthcoming for a decade or more, a “Dance of the Sugar-Plum Fairy” in the minds of city officials from Wal-Mart’s sales taxes. Wal-Mart opened July 18, 2007 and there is still NO Bypass funding to build a road to mitigate their traffic

Now, Yelm’s decision relying on Wal-Mart for tax revenue growth may stall, as they have some major problems that will trickle-down to all of their stores, as this story demonstrates:

“Why Wal-Mart Can’t Compete With Costco for Black Friday”
“Mega-retailer Wal-Mart generally seems like the biggest turkey in retail, even when it’s not Thanksgiving time. However, the megabehemoth, which generally gets the most grief about worker treatment, is once again under fire for its employment policies.

Wal-Mart’s alleged agreements to Florida requests after workers’ recent strike there have galvanized Southern Californians to strike as well, hoping to have their own discussions with the retail giant to improve employee policies.

Some of the complaints are similar to those from last year, when Wal-Mart faced major strikes just ahead of the traditionally biggest shopping boon of the year — Black Friday. In addition to the usual complaints about rock-bottom pay, terrible hours, and shoddy benefits, Wal-Mart is perpetuating another major risk to overall business health. Investors should think long and hard about what this means for the long term.

When companies skimp on costs related to their employees, service — one of the most elementary and essential factors in retail — starts to disintegrate. It’s not even just a morale problem, which in itself is a negative. Obviously, miserable workers make for a sad and oppressive experience.”

It’s not impossible to pay employees well and have a profitable business.
Take Costco, which pays its employees an average of $20.89 per hour. On the other hand, Wal-Mart pays an average $12.67 per hour to approximately 475,000 full-time workers in the U.S. However, its quite another story for its nearly 1 million part-time workers here, who make about $9 per hour, or approximately $26,000 per year.

Costco has stable and even super-loyal clientele as well as workers with no real reason to complain. From the investor standpoint, Costco’s longtime operational decision to sacrifice some near-term profitability to actually provide comfortable and upwardly mobile jobs for workers has worked out very well, hasn’t it? It hasn’t exactly been a stock dud.

At Costco, employees stick around far more than workers do at other retailers. In addition, and in line with the American dream, there actually are real opportunities to rise through the ranks at Costco,” quoting Alyce Lomax, The Motley Fool.
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Posted by Steve on November 16, 2013 at 5:45 am | Permalink

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