Earlier this year, WalMart became one of several corporate heavyweights to lift wages for its meagerly compensated workers, around 500,000 of which are now set to receive at least $9/hour and $10/hour by Q1 2016 (that of course assumes they make it on $9 an hour for another 12 months and don’t seek out other employment by sheer necessity).
Meanwhile, as we noted earlier this month, the move by the country’s largest retailer to pay a few extra pennies to its (basically) minimum wage employees comes at a cost to the company’s suppliers because when you operate on the thinnest of margins in order to be the “low price leader,” someone has to pay for those wage hikes and you can’t pass along the costs to customers because many of your low-income patrons are operating from the same tax bracket as your low-paid employees.
As such, the poor companies along the supply chain are forced to lower their prices and of course they’re going to comply because well, you’re WalMart meaning you’re your vendors’ biggest account pretty much by default. The outcome is that “while WMT (or MCD or GAP or Target) boosts the living standards of its employees by the smallest of fractions, it cripples the cost and wage structure of the entire ecosystem of vendors that feed into it, and what takes place is a veritable avalanche effect where a few cent increase for the lowest paid megacorp employees results in a tidal wave of layoffs for said megacorp's vendors.”
If that doesn’t turn out to be enough in the face of an economy which isn’t really recovering and in which low-income shoppers are constrained by lackluster (and by that we mean nonexistent) wage growth, some sacrifices may have to be made. The problem is that laying people off and shuttering stores two months after a celebrated wage hike initiative doesn’t inspire much confidence and could turn into a PR issue, but one thing you could do is get creative, and while we’re not plumbers, we do find it curious that five geographically distinct WalMart stores have been closed in the past week for “ongoing plumbing issues that will require extensive repairs.”
Here’s more from a local CBS affiliate:
10 News called the county. Officials say they have no record of any code or permit violation at the Brandon location.And when 10 News was at the Walmart Tuesday, there were no marked septic trucks or plumbing vehicles in the lot."Where is everybody if they're supposed to be working on everything where are all the trucks?" asked shopper Melissa Dupuis.10 News asked a Walmart spokesperson whether the five stores were built from the same design, whether they had the same contractor, anything to understand why all of them closed on the same day for "plumbing issues."The only thing they have in common, the spokesperson said are the highest number of plumbing incidents.Leaving some customers to wonder "how many things have they not said. That's scary," said shopper Norma Espinosa.
And here’s more from a local ABC report in Florida:
BRANDON, Fla. - Employees of a Walmart in Brandon that abruptly closed Monday were among more than 2,000 employees nationwide who learned almost simultaneously they were being laid off.In a nearly identical manner at every store, Walmart corporate officials visited the five locations, called an impromptu meeting in the back of the store and told employees that the stores would be closing that evening.Besides Brandon, the affected locations were in Pico Rivera, Calif., Livingston, Texas, Midland, Texas, Tulsa, Okla.“The issues mostly relate to clogs and water leaks in the plumbing - we’ve had persistent issues over the last several years,“ said a Walmart spokesperson said.“These incidents impact the availability of water and create drainage issues for critical areas of the store which impacts our ability to serve customers,” she said.“Normally, we do our best to avoid disrupting a store’s operations. However, given this particular store had one of the highest incidences of plumbing issues in the entire fleet and in order to reduce the costs associated with these incidents, we felt it was in the store’s best interest to invest in making the necessary improvements to resolve these issues,” the spokesperson said.The I-Team has learned that none of the five affected stores have sought any plumbing permits for future repairs.“We’re in a holding pattern. We’re anxious to learn exactly what they’re planning,” said Pico Rivera City Manager James Enriquez, when we contacted him about the store’s closing Tuesday.Enriquez says when Walmart notified the city Monday that it was closing the store, he offered his full support in trying to get it back open.“My building official walked out there and didn’t see any work being done,” he said.
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So there you have it, “clogs and water leaks” but no plumbing permits and 2,000 affected employees, many of whom were presumably just given the news that they would be getting a raise only to discover that they will get 60 days of pay before they’ll need to find a job at another WalMart location (hopefully one with no plumbing issues) or find other employment. We’ll leave it to readers to discern if these “clogs and leaks” are real or whether the company is just quietly shutting down stores across the country.
Credit to Zero Hedge