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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]At some point the question becomes whether corporations and employers are responsible for the well being of their employees.  How much profit is enough when it comes at the expense of society?  We are continually told that "job creators" need subsidies and tax breaks and concessions for the betterment of our general economy.  Corporations are given BILLIONS in concessions and then, when asked to spare some of this largess for their employees at the bottom, they scrimp and cut hours, benefits, and other basics.

You can say, oh, but the free market!  But the free market shouldn't include subsidies and tax breaks, then.  At what point are corporations socially responsible and required to preserve hours and pay well - even if it means a slight hit to the bottom line (but still being profitable).  That's the shame about Walmart.  They screw their employees, they screw their suppliers, and all so they can be even richer than they already are.   [/quote]

Two problems:

First, corporations are tax collectors, not tax payors.

https://mobile.nytimes.com/2008/06/01/business/01view.html

Likewise, they don't really receive tax breaks and subsidies, they are simply pass through entities for the economic benefit.

Second, capital will almost always seek the highest AFTER TAX returns possible. All else being equal, capital will be allocated to an investment that returns 10% vs one that returns 9% after tax.  Since capital is mobile, the idea of simply taking a "slight hit to the bottom line (but still being profitable)" won't work. You'll starve the company of capital as investors flee to better investments.

What you're asking for is the equivalent of asking the process of natural selection to be less ruthless even if it means that the species that is evolving ends up being weaker than it would have otherwise been. [/quote]

DP - I don't think it is necessarily a logical followon that the species to evolve will be weaker.  Compare Costco vs. Sams Club.  Same business model but Costco treats its employees better - yet they have been doing just fine.[/quote]

Unless you think Ferrari and Ford are operating the same business model, there is no reason to suggest Costco and Sams are the same business model.  They are targeting different revenue streams, customers and markets....

That's isn't to say one is inherently better than the other. They are both pretty good at what they do, but the Costco model wouldn't work at Sams or vice versa. [/quote]

How are Costco and Sam's club different? You buy in bulk right? I thought it was a good analogy and a reason why I have been a Costco member for years. I also buy coffee at starbucks because they give health insurance and education benefits to employees. Also, just because you are targeting different consumers doesn't give a company license to be fiscally irresponsible. If they can't afford benefits for all their full and part time employees, they need to employ fewer people. [/quote]

Costco has roughly 500 locations nationwide. On any given day there about 4,000 different items that can be purchased from Costco. This limited size allows Costco to be hyper-efficient (like Trader Joe's). As a result, they make lots of money per employee. Costco targets UMC households with disposable income who like the convienece of buying in bulk and don't mind paying a small premium (e.g., two gallons of milk at Costco are slightly more expensive ban two gallons of the same milk at your local grocery store).

Sams has 4500 locations nationwide. On any given day there are about 144,000 different items that can be purchased from Sams. Because of the scale involved, Sams cannot achieve the same efficiencies that Costco achieves. Furthermore, Sams targets soldily middle class households that need to buy in bulk to achieve the savings that comes with bulk purchases.

Ferrari and Ford are both in the car business, but they are entirely different business models targeting different domographics.

Do you really think it is as simple as hire fewer people?  Say what you will about WalMart, but it is ruthlessly efficient. [/quote]

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