Black Friday, Unions, and Stakeholder Value

This year, we've been given some food for thought to go with our Thanksgiving feasts. Even as big-box companies like Wal-Mart (NYSE: WMT  ) and Target (NYSE: TGT  ) are stirring up controversy by starting up the holiday shopping frenzy on Thanksgiving Day instead of the traditional Black Friday kick-off, some Wal-Mart workers are threatening to strike, with a little nudging and support from a union-backed group.

This controversy is about more than unions versus big corporations. It's the perfect time to think about stakeholder value -- which takes employees and suppliers into account as well as shareholders -- and how shareholders can adjust their thinking about corporate cost structures and management priorities.

The Twinkie offense
Unions have been top of mind given the recent Hostess controversy, which involved a nationwide strike after the company's management sought to cut costs at the expense of workers' pay and benefits.

Granted, unionization wasn't the only culprit in the Hostess debacle. Consider changing perceptions of healthy fare, high sugar prices, and allegations that management, which wasn't even comprised of "true bakery operators," took sweet, lucrative pay deals even while fighting worker's demands. Last but not least, this isn't even the first time Hostess has struggled with insolvency; it's been stale for a while.

In this case, though, we can at least address one fatal flaw of unions: When a company's in bad enough shape, strikes over cost containment only hasten companies' demises, and end up generating nothing but pink slips, which can't really be defined as "progress" or "pro-worker." (In fact, the Hostess situation could threaten nearly 19,000 jobs.) After all, there's a point when economic reality intervenes. Companies can -- and do -- go bankrupt.

If anything, the Hostess situation probably points out that one very important set of stakeholders -- companies' workers -- are in double jeopardy if they are at the mercy of greedy management, overly zealous unions, or heaven forbid, some poisonous combination of both.

Wal-Mart's "no-can-do" attitude on workers
That dramatic and well-publicized skirmish between unions and corporate America brings us to the next high-profile labor news, just in time for the holidays: the Black Friday protests against Wal-Mart organized by a union-backed group, OUR Wal-Mart.

Although Wal-Mart isn't unionized, some workers plan to protest anyway. These actions aren't simply due to the fact that some Wal-Mart workers will have to work on Thanksgiving, although the timing certainly lines up as a proverbial "last straw," perhaps, not to mention a perfect time for publicity. Other grievances include low wages, lack of affordable health care, and low hours.

Apparently Wal-Mart's taking this threat so seriously that it has filed a complaint with the National Labor Relations Board, a step it hasn't felt compelled to take in a decade.

As much as union demands can be completely unrealistic -- recall that the unholy alliance between demanding unions and overpaid management at old General Motors led to that company's financial downfall -- Wal-Mart richly deserves the criticism.

Wal-Mart has been struggling to give its sales and profits more pizzazz. However, its market cap is $231 billion, and it generated $464.41 billion in annual sales in the last 12 months. Although Wall Street analysts and short-term traders may be looking for more "wow" from Wal-Mart lately, the truth is, Wal-Mart is a stalwart and a profitable company. It's hardly struggling for survival.

Along those lines, though, of Wal-Mart's greatest competitive achievements -- like low prices -- may be one of its lowest moments. Its rock-bottom prices often come at the expense of worker and supplier financial well-being. One would think a company as powerful as Wal-Mart could treat its workers better. Like many other companies, it simply chooses not to make that kind of innovation a priority.

Fringe benefits for all stakeholders
Right now, retailers that treat workers well are relatively rare, but they do exist. Whole Foods Market (Nasdaq: WFM  ) , Costco (Nasdaq: COST  ) , and Starbucks (Nasdaq: SBUX  ) are among the companies that choose to give their employees pay and benefits signifying respect. Health care benefits, stock plans and options, and above industry-standard pay are among the selection of benefits those companies offer their employees.

Some investors -- including myself -- believe that the recognition of stakeholder value is an essential component of a great company, and that long-term shareholders are richly rewarded by companies that practice it. Happy workplaces create satisfied customers, and loyal customers will result in growing shareholder value. It's pretty simple, really, but too many corporate managements and investors refuse to see that big-picture view.

Furthermore, even regular Americans should visualize the complex meaning of how they spend their money. Low-priced goods at Wal-Mart at least partially come at the expense of American workers' pay and benefits, not to mention extremely cheap labor in China.

Furthermore, Americans who choose to shop on Thanksgiving are setting an ugly precedent; that's one less commerce-free holiday when retailer workers can spend time with their families, and retailers won't continue to open on Thanksgiving if consumers don't take the bait. Getting paid time and a half may be some consolation to affected workers, but let's not forget that lost moments with loved ones can never be gotten back.

Stakeholder value is more important to business and investing success than the short-term "shareholder value" focus. This Thanksgiving, let's ponder what "value" really means and adjust our spending and investing accordingly.

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  • Report this Comment On November 21, 2012, at 4:32 PM, lemoneater wrote:

    Happy Thanksgiving, Alyce! I agree we do not need a Black Thursday!

  • Report this Comment On November 21, 2012, at 4:34 PM, TMFLomax wrote:

    Happy, happy Thanksgiving, lemoneater! Enjoy your holiday *without* the retail madness! :) That's what I plan to do!

    Alyce

  • Report this Comment On November 23, 2012, at 4:54 PM, MagicbyMark wrote:

    "If anything, the Hostess situation probably points out that one very important set of stakeholders -- companies' workers -- are in double jeopardy if they are at the mercy of greedy management, overly zealous unions, or heaven forbid, some poisonous combination of both."

    As far as I know, the 15,000 workers who were laid off didn't get a $1.75 million dollar bonus as they vacated the premises. Union workers had taken several pay cuts in the past. I'm going with greedy management in this case. NOT overly zealous unions who are only trying to protect workers. Greed isn't good. It's bad business.

  • Report this Comment On November 23, 2012, at 4:54 PM, terryongarland wrote:

    One can see that Wal-Mart employees are not getting the best treatment, but one could also see that maybe , in this economy, it's the best they can get. If a worker has more value , maybe they would be working at Whole Foods etc. Sad, but reality often is.

  • Report this Comment On November 23, 2012, at 5:05 PM, jepepp wrote:

    THIS IS THE GREATEST COUNTRY IN THE WORLD WHERE PEOPLE HAVE MANY FREEDOM'S OF CHOICE. IF ONE DOES NOT LIKE WOKING AT WALMART THEY SHOULD GO ELSEWHERE. LIKEWISE, IF ONE DOES NOT LIKE SHOPING AT WALMART THEY SHOULD SHOP ELSEWHERE.

    IT'S MY OPINION THAT THE WAMART PROTEST IS SPONSERED BY THE UNIONS MORE THAN THE EMPLOYEES AND FOR THE UNION'S PURPOSES

  • Report this Comment On November 23, 2012, at 5:07 PM, eddietheinvestor wrote:

    Another, typical, left-leaning Motley Fool post.

    Some Wal-Mart workers are striking with a LITTLE NUDGE from unions? Are you for real? This is a coordinated effort by unions to destroy Wal-Mart and strong arm workers into forming unions, the same unions that destroyed GM and Hostess. You mention that Hostess' "management sought to cut costs at the expense of workers' pay and benefits." It was not for the company's profit but for its survival. And Wal-mart was not "stirring up controversy" but choosing to open on Thanksgiving. The company made a choice. It's the company's right to make this choice. It's the unions that made it into a controversy and create bad publicity for Wal-mart. CVS was open as well, but I don't see picketing outside CVS. I spoke to Wal-mart employees today. They told me that they had a choice about whether they wanted to work yesterday. When Wal-mart opens a new store, thousands of workers come to apply because Wal-mart gives people jobs--not great jobs, but still jobs. And millions are unemployed, no thanks to the worthless stimulus bill that created almost none.And the NLRB is a worthless, pro-union, anti-business board--the one that stopped Boeing from offering many jobs in South Carolina (Boeing).

  • Report this Comment On November 23, 2012, at 5:23 PM, 1939johnmark wrote:

    How does the combined value and sales if WMT compared to the total sales combined of COST, WFM and SBUX? Do people who stop at Starbucks and spend $4.00 for a coffee shop at Walmart?

  • Report this Comment On November 23, 2012, at 5:25 PM, astrosnider wrote:

    Thanks for your sensible comments, Alyce. I appreciate reading an investor article that stands up for companies that offer their employees decent pay and benefits. I like Costco and Starbucks (and I own their stock), but I would never shop at or invest in Wal-Mart.

  • Report this Comment On November 23, 2012, at 5:26 PM, StinsonFool wrote:

    To eddietheinvestor: Right on the mark.

  • Report this Comment On November 23, 2012, at 5:38 PM, CincyWalrus wrote:

    Who ultimately pays for increased wages and benefits? It's the consumer. If a company provides the same level of profis to its shareholders, the increased costs on greater wages and benefits will be passed on to the consumer. Are you as a consumer willing to pay more for the goods you buy at Walmart so the workers can receive better pay and benefits? Or will you go to a competitor who offers the same goods at a lower price?

    There are a lot of people who have to work holidays. I agree with the prior comment that if you aren't willing to work holidays, work at a place that doesn't require holiday work.

    I was a union employee for 4 years. Frequently, it isn't the pay and benefits that cause problems, it's the work rules. As an example, our team had to rest on our laurels while one of our team members had to run to the restrooom because he had partied too hard the night before. Four people sat idle several times for 5-10 minutes each day because of one person. The union wouldn't allow "floaters" to fill-in while an employee was unable to perform his/her job.

  • Report this Comment On November 23, 2012, at 5:42 PM, mbeach89 wrote:

    You do realize the union bussed people in to protest. Few if any are even Walmart employees. I work at Walmart, and although starting wages may be low, the opportunity is certainly there for ambitious individuals to move up to management positions. The store manager here is a very ambitious 31 year old and doing VERY well! Walmart also hires folks that a lot of places won't even consider. If one is not ambitious and is satisfied running a register and not moving up in the company, they aren't going to be paid like a doctor or lawyer! People have choices in life! No one is being forced to work at Walmart or anywhere else. See it for what it is! The unions see Walmart as a HUGE MONEY GRAB! They don't give a flying #%&@ about Walmart employees. What they do care about is $$$$ and all the union dues they want to collect from these employees. Stop bashing Walmart!

  • Report this Comment On November 23, 2012, at 5:50 PM, PoundMutt wrote:

    "the 15,000 workers who were laid off didn't get a $1.75 million dollar bonus as they vacated the premises."

    That is 5.6 cents per hour for a 40 hour 52 week year.

  • Report this Comment On November 23, 2012, at 5:53 PM, spmccown wrote:

    Excellent Article! I definately agreee with the encroachment on Thanksgiving. No where in the Bible do you see where the 3 wise men were out shopping on Black Friday for gifts for Jesus. I would suggest today, you would still be hard pressed to find 3 wise men shopping on Black Friday!

  • Report this Comment On November 23, 2012, at 5:58 PM, lilybriscoe2 wrote:

    Walmart is the biggest 'Welfare Queen' in the United States. It is shameful how the US government has to subsidize the low wages that they give them employees at the cost of taxpayers. For a company that brings in hundreds of billions a year, they should be forced to pay their workers wages that make them self-sufficient rather than expecting the government to make up the difference. Listen to these stats:

    "Walmart's employees receive $2.66 billion in government help every year, or about $420,000 per store. They are also the top recipients of Medicaid in numerous states. Why does this occur? Walmart fails to provide a livable wage and decent healthcare benefits, costing U.S. taxpayers an annual average of $1.02 billion in healthcare costs. This direct public subsidy is being given to offset the failures of an international corporate giant who shouldn’t be shifting part of its labor costs onto the American taxpayers.

    Wal-Mart workers’ reliance on public assistance due to substandard wages and benefits has become a form of indirect public subsidy to the company. In effect, Wal-Mart is shifting part of its labor costs onto the public."

  • Report this Comment On November 23, 2012, at 6:01 PM, polabair wrote:

    Walmart has a bad rep in my home town, intimidating workers to clock out then go push carts in the parking lot on their way off the property. The millions they've spent on anti-union propaganda could have gone a long way toward improving worker benefits. I'm tired of hearing the villains in this are folks that want 10-12 dollars per hour, a 40 hour work week, and some kind of health insurance.

    It's a disgrace.

  • Report this Comment On November 23, 2012, at 6:58 PM, maiday2000 wrote:

    One thing I was thankful for this year was that I had not seen an Alyce Lomax article on the MF in a while. All good things must come to an end, I guess.

    Demonize Wal-mart, make excuses for unions, bemoan the "horrible" conditions and wages that those poor victims, aka "employees," must endure. Compensating people more than their marginal revenue product is a losing proposition in the long-term.

    By the way, Ms. Lomax, while you excoriate these companies that "refuse to see that big-picture view," they still seem to be pretty successful. What billion dollar business have you ever created?

  • Report this Comment On November 23, 2012, at 7:00 PM, Jurobi wrote:

    Note: My son works for Walmart. In fact he has been working graveshift for months (part time), including the night before Thanksgiving, Thanksgiving, and Tonight. That being said, when I stated working all those decades ago, I would have killed to work at a place with the benefits Walmart provides my son...stock purchases, 401 K with matching to 6%, and even the limited medical benefits. IN fact, comparing his pay for unskilled labor (over $9.00/hour) to mine at the same age (less than $2.00/hour) and the fact that he paid less in taxes than I did at that age, I shed no tears over the poor Walmart Workers.

  • Report this Comment On November 23, 2012, at 7:02 PM, pixal wrote:

    While this is an interesting article, it clearly has a liberal bias. A more balanced approach could also address the substantial differences that Walmart could be facing compared to the MUCH smaller companies that are praised. While SBUX, WFM, and COST are truly great companies, they do not face the same personnel costs and issues as Walmart which has 15 to 38 times more employees than those companies. Also, Walmart provides work for many people who may not be able to find work at SBUX, WFM, and COST. Maybe we need "Walmarts" as well as the other companies in order to fulfill part of our supply and employment needs. It seems to have worked for the last 50 years.

  • Report this Comment On November 23, 2012, at 7:08 PM, canadacomments wrote:

    I can think of many more arguments on both sides of this debate. As a father who had children working in retail to help with college expenses I know that working in retail is the pits - low pay, bad management and having to put up with snarky customers. The manager's in many retail clothing stores hardly make a living wage, let alone the floor workers. I might put more stock in the "quotation" from lilybriscoe2 if it was attributed to something or someone. As it stands its just rhetoric. Unions can help achieve better wages and working conditions but most union management firmly believes that the workers work for them, not the company. Thank goodness that your founding fathers had the good sense to put checks and balances into the american system because there is always more than enough blame to pass around.

    Hope you all had a great Thanksgiving!

  • Report this Comment On November 23, 2012, at 7:21 PM, TexanSooner wrote:

    My experience with heavily unionized workers is they wind up paying for two sets of "management" - the company's and the union's. a large percentage of the time, neither of those two actually has the workers' best interest at heart. (Not to mention the other stakeholders...)

  • Report this Comment On November 23, 2012, at 7:22 PM, rd80 wrote:

    Walmart's profit margin is a whopping 3.7% according to its stats page on TMF. How much could it raise worker pay without needing to raise prices?

    And if Walmart raises prices, who do you think gets hit the hardest?

  • Report this Comment On November 23, 2012, at 7:35 PM, Samskiman wrote:

    I've never bought a Chistmas present on Black Friday and have no plans to do it on Thanksgiving Day. I can't imagine the type of deal it would take to entice me away from things that I find far more enjoyable.... but to each his/her own.

    That being said...

    The expectation that a job at Wal-Mart, or any similar retailer, is a ticket to the middle class is deluional. It's the same type of thinking that brings us "I can't retire on just social security..." that's right, you can't. "I can't raise my family working at Pizza Hut..." that's also correct, you can not.

    The comments that $10-$12 per hour a 40 hour week and some health insurance are not too much to expect... well that may be very true, but expecting that out of a job at Wal-mart is very flawed thinking. Expecting a entry level job to deliever everything you need as you exit your teenage years is a huge mistake, find a job that supplies what you need and feel you deserve.

    These kamikaze unions will keep it up until they're able to harm Wal-mart, and others, via the increased costs that come with union involvement, etc., or via some misplaced consumer sympathy that results in reduced sales volumes for the retailer. I'm optimistic that this type of behavior will lead to continued success with right to work legislation in states that are slow to end that dis criminatory practice. The union agitators orchestrating this media event are clearly over playing their hand.

  • Report this Comment On November 23, 2012, at 7:42 PM, lilybriscoe2 wrote:

    Canadacomments:

    The stats come from a California based study from UC Berkeley called the Hidden Costs of Wal-mart Jobs.

    These stats are similar in other states: http://www.goodjobsfirst.org/corporate-subsidy-watch/hidden-.... That link has a breakdown of a number of different studies.

    Low prices are great. But they are artificially low prices if taxpayers are subsidizing them since the wages being paid are not living wages. Even if you don't shop at Wal-mart you are supporting that company and its shareholders by helping to support an unsustainable business model through your tax dollars.

  • Report this Comment On November 23, 2012, at 7:57 PM, EDJMCPS wrote:

    I worked retail for 5 years while I earned my degree and I came to the conclusion, it is not what I want to do for the rest of my life. The straw that broke my back was when I had an hour drive to work, was forced to do Midnight Maddness Sales till 2:am drive home & be back at work at 8:00 AM the next morning. It was not even my store, but management was so bad I was requested and talked into cleaning up anouther mess. Your reward for working hard was more store cleanup. This was 1972 and I doubt anything has changed. Leaving a company called Zayre turned out to be the best thing I ever did. I found a job outside retail, worked my way up and retired after 39 years at a great Roofing Mfg. Co. PS: I really enjoyed the holidays after I left retail. As my Father in Law said in 1977 when I was getting married "Don't let your children go into retail, have them get into anything but retail. "

    .

  • Report this Comment On November 23, 2012, at 8:35 PM, mythshakr wrote:

    Walmart spokespersons have said in several venues for many years that it does not consider health care a corporate responsibility but a public one. In one interview I watched several years ago one Walmart spokesperson when asked whether or not this mean't they supported a Medicare type plan for all the response was " Walmart does not currently support any blah blah blah... but that is certainly one possibility".

    The jist of the interview was if health care is a corporate responsibility then it has an impact on their competitiveness, if it is a tax paid by everyone it is not.

  • Report this Comment On November 23, 2012, at 9:24 PM, wjcoffman wrote:

    "After all, there's a point when economic reality intervenes. Companies can -- and do -- go bankrupt."

    Wow! What a novel concept! I didn't think that happened anymore. Oh, the next election is 4 yrs away. By then the average voter will have forgotten. Plus, Hostess makes sugary snacks that has no constituency. Ooops, that's the turkey talking, sorry.

  • Report this Comment On November 24, 2012, at 5:32 AM, brittlerock wrote:

    Don't own WMT. Don't shop there either. But more generally, I don't understand why there isn't outrage with executive compensation at almost every major corporation. It is very plainly and very simply greed at the expense of the employee. In most cases, that's you and me - those of us posting here.

    I'm one of the vanishing middle class. At the fortune 100 corporation where I worked before I retired I labored under five different CEOs. All of them were compensated better than the average employee, and very few of the employees had any problem with that under the first three. Why was that? Two primary reasons: first, the pay disparity was not at a ratio of several hundred to one, second, under each of them the employees actually saw improvements in overall compensation.

    But then in the 90s things began to rapidly change. Executive pay soared. The focus of the company changed from stakeholder value to shareholder value. There was a progression of reversals of employee benefits. Defined retirement benefits were eliminated. The company which had set an example in corporate America with respect to educational benefits, did away with those benefits. Overtime pay which had always been paid to non-management irrespective of payroll status because "it was the right thing to do" eliminated OT except when legally required to pay it. The company had always offered great health care benefits, and maybe still does on average, but just the same more of the costs have been shifted to the employee. So on and so forth.

    And management just told outright lies to the shareholders because as the bottom line improved, they attributed it to increased efficiency of operations and patted themselves on the back. But really, it was just simply a case of changing the corporate culture from one of treating the employees as partners in the business to a culture of treating the employees as expendable tools.

    And maybe the saddest part of this story is that it is impossible to tell which company I'm talking about because the story is so true for so many big corporations.

    There's a reason that big corporations seldom show up on any of those lists of great companies to work for - it's because they aren't.

    I'm sure a lot of investors who follow the fool and who post here will think this is good management. Cutting every cost that can be cut is management's job.

    But I think America has lost some of it's greatness in all this. The distribution of wealth in America has grown increasingly disparate. Fewer Americans have more of it. But I think it's bad for America when 6 members of of one family have a combined net worth that exceeds the bottom third of all Americans.

    Even as an investor who hopes to profit from great companies, I just can't understand how that can be viewed as a positive thing.

  • Report this Comment On November 24, 2012, at 8:56 AM, rehctub wrote:

    Ms. Lomas appears to think a company exists only to employ people and pay taxes and if that exists then customers will flock to their door.

    Who pray tell will capitalize that concept?

    The Fool doesn't exist to protect employees. You make money from well run companies.

    While I may agree, top manage may be over paid. dragging a company down because of that or low wage/benefits for employees will not improve the economic situation of our people or our nation.

    The fault lies with the actions or inactions of stock holders most of whom are company's like yours, in addition to 401k, and Fund managers who are the only ones who have the voting power to control top management salaries.

    You likely won't break a company or force capital holders to lose money by controlling top salaries.

    But you Damn sure will by supporting boycotts and unrealistically supporting increased wages/benefits for the masses.

  • Report this Comment On November 24, 2012, at 9:10 AM, beyondo1 wrote:

    Great article.

    No one can deny that a company that proactively takes care of their employees, treats them with respect and rewards them when successful, will benefit greatly in the long term. Loyal, hard working employees can and will get a company through hard times.

    It is also amazing to me why we see so many anti labor posts and comments around the web, when you consider that the vast majority of them are made by "working people". ??

    Remember, "Beating your horses hard and feeding them less will result in a very short trip"

  • Report this Comment On November 24, 2012, at 10:03 AM, RavenandSunny wrote:

    Walmart serves a great many people who could not afford to shop in other stores. I don't think that many of the less fortunate in world could afford to pay the $100 price tag for a little girls winter jacket that Kohl's is charging. Walmart also provides jobs for those who cannot work full time. Starbucks and Whole Foods can well afford to pay great benefits to their employees as they products are totally overpriced. If all the Walmart employees unionized, Walmart could no longer be the affordable alternative for millions of lower income people. The fact that the promote from within is another plus on Walmart's side. Other stores have to keep their competitive because of Walmart's slim profit margin. Walmart serves many purposes in our society.

  • Report this Comment On November 24, 2012, at 10:30 AM, fontanableu wrote:

    Interesting all those college educated employees at walmart should look for other jobs at target, vons, food 4 less, or dollar store, where a college educated worker will get respected. Although I do not agree with all your smarts, someone has to fit the bill, and when you invest in walmart those that work there also are thought of when I invest and the last time I checked unemployement is high and so are sales for low prices like walmart. I don't make the rules I just learn the game so I can play it well.

  • Report this Comment On November 24, 2012, at 10:52 AM, SkepikI wrote:

    Wow..so much heat and so dang little light...No doubt union "issues" will continue, and if fewer unions exist there is a reason. Americans form voluntary associations at the drop of a hat for the most sublime and frivolous reasons. I doubt you would see the Audubon society protesting and protesting against windmills because their enforced membership was shrinking. Of course they don't get to collect dues from frustrated members or steal from the pension fund. Just my former union slave (from a summer job in college) observation.

    I am more than a little disgusted at the low level and lazy treatment of the hostess situation. A three minute search got me to the creditors website where I could read for myself the October 2012 numbers for myself (implicit assumption they were accurate, but thats better than not even looking). In Oct Hostess revenue was about 200 million. Its ingredients cost about 40 million and labor was about 20 million. Other expenses totaled roughly 51 million. Gross profit about 80 million, net loss after selling expensesand workmans comp 15 million. SO YES they have other problems than labor. But they need to get 15-16 million out of all their costs including labor to have a prayer. This was reported nowhere. (not even in Alyce's article) Lazy and incurious.

    Even if you get 8% out of labor, Hostess still had to find some $14 million A MONTH in cost reductions from other places. And driving management costs to zero wont do that. On the flip, its pretty clear to me at least that if you dont save something on labor (and 8% is pretty minimal) its hopeless. Which is where Hostess wound up and why the judge agreed, I think.

    What also doesn't get mentioned is that the Unions got equity and GOT ALL THESE NUMBERS themselves as a result of the bankruptcy. WHY then did they tube the deal? Its only an assumption, but the logic that one union at least agreed it was hopeless and better for the creditors and unions for Hostess to liquidate than to keep this Zombie walking.

    The only other rational possibility is that the one recalcitrant union (all the others agreed to the 8% reduction) just wanted to be contrary.

    Nothing I've read so far leads me to a better understanding of what happened than the above. Hmmm Hopeless Hostess....maybe someone else non-union can make those worthless products that people love...

  • Report this Comment On November 24, 2012, at 12:18 PM, ch1ckster wrote:

    No matter how you slice and dice the issue of unions, companies, consumers, shareholders and the government, in the end it's about competition in the international marketplace and being able to outperform anyone else that's out there. If it was all about redistribution, we could put a third of the population to work in construction, one third in food production, ane the rest in providing services. Then the world could sit back chuckling and commenting using a Dr. Phil euphamism, "How's that working for you?"

  • Report this Comment On November 24, 2012, at 12:39 PM, bluesharpbob wrote:

    It's no accident that as unions have declined in America,so has the middle class. CEOs & Boards of Directors pay themsleves millions upon millions while crying poverty & claiming they can't afford to give employees benefits & pensions. The free trade aggrements allow other countires to flood our markets with undepriced goods & make outsourcing a preferred way to do business.

    An entire generation is soon coming up on retirement age & will have no pensions to help support themselves in retirement & not enough savings to make up for it.There are only so many store greeter jobs to go around-You're going to see a lot of these " I hate big government" conseratives applying for welfare & food stamps-or trying to sponge off their kids!!!

  • Report this Comment On November 24, 2012, at 12:46 PM, 48ozhalfgallons wrote:

    A paradigm shift to a shared output economy favored over a competitive accumulation economy would have the best chances to avoid violent revolution. The demonstrations of today are destined to evolve into bloody revolts if the accumulation gap continues to grow.

    An example of the accumulation gap: Yesterday, I ventured to the mountains to cut a Christmas tree. The area available for cutting required passing through a community which about 12 years ago consisted of a group of modest cabins, mostly shacks, some with electricity and wells all dating from the late '40's and early '50's

    Expecting to pass through an unchanged environment, instead, I passed by several three to five thousand square foot "second" homes, many requiring blasting into rock cliffs to create a site. State and Obama money was used to not only pave and widen the once dirt road, but to build extravagant retaining structures, electricity and water access to accommodate the sites. Nearest civilized services are 90 miles away, and I live in a state at the bottom end of per capita income.

    My city has twice as many Walmarts as it does currently low-graduation-rate high schools. Only one high school boasts a 90% graduation rate; of course that school occupies real estate centered in the 1% area of town.

    Continuing our economic model is indeed inviting revolt. The mantra for tomorrows capitalism is winner takes and keeps all if he can survive the angry masses invading his territory.

    The wealthy occupy grand summer homes on sand bars on the Eastern seaboard coast, on the mud and brush cliffs of California, on steep avalanche prone slopes of ski resorts, in drought prone forests destined to catch fire, etc. There are no limits to their presumption upon common sense, nature and those who are close to them. They are endowed and presume themselves superior without vulnerability. Their insurance coverage is their resurrection. Others around them are expendable. "The offspring of riches: Pride, vanity, ostentation, arrogance, tyranny." - Mark Twain

  • Report this Comment On November 24, 2012, at 1:18 PM, vebb wrote:

    I agree with "jepee" and "eddietheinvestor." . I am also considering unsubscribing with TMF as it too has become left -leaning. I'll do my own editorializing , thanks.

  • Report this Comment On November 24, 2012, at 1:35 PM, kmtominey wrote:

    Firms that treat their employees well succeed because the service they give is superior. I don't now and never have shopped at Walmart because of its policies. Costco and Starbucks for example are profitable and offer their employees - even part timers - benefits.

    Walmart is a firm that actually offers seminars to its employees on how to tap into the local governments food stamp, rent support and other programs to make up for the poor pay and benefits.

  • Report this Comment On November 24, 2012, at 3:11 PM, Samskiman wrote:

    I remember way, way back when I thought of The Motley Fool as a source of investment information, not as a source of weak .org and .edu style attempts at political indoctrination.

    How about you folks get back to giving us the news and we'll take care of figuring out how we should feel about it. There is plenty of sources out there for those that wish to find openly political views from either side of the spectrum

    Kmtonminey, as a part time (and small time) landlord, I can assure you that there are many oganizations that coach, etc., individuals on "how to tap into the local governments food stamp, rent support and other programs..." Churches, neighborhood organizers, school systems among many others. Even governments themselves spend money and employ staff for the sole purpose of marketing taxpayer funded programs to possible recipients. If Wal-Mart DID NOT do as you state they are doing, there are plenty of people out there that would say they that should be informing their employees of ways to access those programs. Many of Wal-mart employees are earning as much as they will ever be able to earn based on their level of martektable talents, it's not enough for entry to the middle class, but it certainly exceeds the amount they'd earn without Wal-mart.

  • Report this Comment On November 24, 2012, at 6:48 PM, Fred4953 wrote:

    Walmart has been around for quite a long time, starting in Arkansas, and gradually expanding its reach, mostly to meet the demands of price-sensitive shoppers in the "Red" states. It seems to have done OK at that goal, and has grown rapidly. Now that it has expanded into the "Blue" states, it is getting heat from the socialist-leaning gentry, most of whom would never darken their door. So I agree with "eddie the investor" that its hiring policies are not our business. Let's stick to following the equities market, OK?

  • Report this Comment On November 25, 2012, at 5:24 AM, Vechiger wrote:

    It is rather sad that when considering workers well being or taking into account environmental considerations one is put by some into the left corner. At the moment Apple is the hottest pie in town but reports about conditions for their workers in China or in Germany seem to indicate a lack of investment in human capital. In the long run profit is not all.

  • Report this Comment On November 25, 2012, at 10:54 AM, devoish wrote:

    Walmart's profit margin is a whopping 3.7% according to its stats page on TMF. How much could it raise worker pay without needing to raise prices?

    And if Walmart raises prices, who do you think gets hit the hardest?- rd80

    See it for what it is! The unions see Walmart as a HUGE MONEY GRAB! They don't give a flying #%&@ about Walmart employees. What they do care about is $$$$ and all the union dues they want to collect from these employees. Stop bashing Walmart! - mbeach89

    The comments that $10-$12 per hour a 40 hour week and some health insurance are not too much to expect... well that may be very true, but expecting that out of a job at Wal-mart is very flawed thinking. - Samskiman

    Who ultimately pays for increased wages and benefits? It's the consumer. If a company provides the same level of profits to its shareholders....

    June 2011 - Wal-Mart Stores (WMT: 53.76 +0.19%) announced on Friday that their Board of Directors has approved a $15 billion share buyback program.

    March 2011 - Wal-Mart Stores (WMT: 70.20 +1.90%) announced yesterday that the company will increase their quarterly dividend by 21% to $.365 per share.

    June 2011 - In fact, for fiscal 2011, we returned a record $19.2 billion to shareholders through dividends and share repurchase.” Mike Duke - Walmart President and CEO

    19,000,000,000/ 2,200,000 employees = $8636.00 earned by Walmart employees for investors

    Walton Enterprises, LLC owns 1,609,891,131 shares of Walmart stock or 47.29% -

    http://investors.morningstar.com/ownership/shareholders-majo...

    19,000,000,000 x .47 = $8,930,000,000.

    .... the increased costs on greater wages and benefits will be passed on to the consumer. - Cincywalrus

    Thanks for asking, Cincy - Steven

    One thing I was thankful for this year was that I had not seen an Alyce Lomax article on the MF in a while. All good things must come to an end, I guess.

    Demonize Wal-mart, make excuses for unions, bemoan the "horrible" conditions and wages that those poor victims, aka "employees," must endure. Compensating people more than their marginal revenue product is a losing proposition in the long-term. - maiday2000

    My experience with heavily unionized workers is they wind up paying for two sets of "management" - the company's and the union's. a large percentage of the time, neither of those two actually has the workers' best interest at heart. (Not to mention the other stakeholders...) - TexanSooner

    In addition to how much the employees earn for their shareholders, there is interest expense paid to lenders of 2,300,000,000/ 1,400,000 = $1642. each. - Steven (from the TMF 'statements' page)

    I think it is fair to say that Walmart's employees are providing wealth or retirement to everybody involved but themselves.

    Best wishes,

    Steven

  • Report this Comment On November 25, 2012, at 4:10 PM, Dforberger wrote:

    WOW, a lot of good comments on many side of this issue. However, no one has clearly stated who Wal-Mart’s real competitors are. It’s not SBUX, WFM or COST. Very few customers that shop at these stores also shop at Wal-Mart. The Wal-Mart competitors are the various DOLLAR stores. If Wal-Mart increases their prices the DOLLAR stores will eat their lunch! And, Wal-Mart knows this all too well. Wal-Mart has only one option and it’s a nuclear option. Pick a union state and close all operations in that state. Then Wal-Mart will compete with Amazon on the internet only and pay no sales tax and destroy more low paying jobs in that state. If they don’t we will see another Sears.

  • Report this Comment On November 25, 2012, at 5:25 PM, WindsorMillFool wrote:

    The bottom line here is greed and the development of a culture of insatiable consumerism and instant gratification. Executives and corporations want to make, and keep, as much of the revenue to line their pockets.Consumers want shop in the brightest, trendiest environments, be entertained while shopping, and get the best quality products they can get while paying as little as they can for those goods. Who is stuck in the middle? The employee. I have heard for years that payroll is the most controllable expense a company has when in truth, its usually the only budget that usually hasn't been overspent where companies can find a place to save money. Offer low pay to new employees, cutting hours & benefits to existing workers while demanding more work and cutting the budget the number of people who can be hired to staff holidays (who wants to spend money to train temporary staff) seems to be the answer and puts the burden on the backs of hourly worker. Salaried Middle managers also suffer, having to work longer hours with no additional pay to make up for the labor short fall. Throw in Exaggerated Black Friday and now Black Thursday hours and no wonder people are pissed.

  • Report this Comment On November 26, 2012, at 12:02 PM, magystic wrote:

    The conservatives who rail against the unions do not want to recognize that the taxpayers subsidize workers who do not earn a living wage. No matter what the company, a living wage ought to be a below the line cost. Dollar store, Wal-Mart, or wherever. American business attacks entitlement spending only when it applies to the poor in America, the richest country in the world. Is there a possible compromise between a healthy business environment and a living wage? The executives would have people "lower their expectations" of social security. Please! If we mandated a living wage, we would not rid ourselves of the poor, but we would make it possible for folks to work and support their families. After a time, the costs would be incorporated into the system. Workers and businesses would pay more into social security. If one gives business all it wants, the taxpayer will continue to subsidize both big business and the poor. Romney got a lot of traction by pointing out that the middle class was doing much worse in the past thirty years. He did not, however, point out how well the executive class had done. Fortunately, the people detected a whiff of snake oil in his pitch. It's time for Americans to take back America from those who have ridden on the backs of the middle class by shifting their costs to the taxpayer through subsidies and lower wages creating a need for entitlements.

  • Report this Comment On November 26, 2012, at 12:38 PM, KyleSanDiego wrote:

    Alyce,

    You are obviously biased and your article is neither fair or balanced. I really wish TMF would stop the politics, and only focus on investing. Your article was a waste of my time. Perhaps TMF could start left leaning political article with a note to that affect. Then I can skip those articles.

    Thanks

  • Report this Comment On November 26, 2012, at 2:45 PM, devoish wrote:

    Alyce,

    I agree with KyleSanDiego.

    An unbiased article would have made the comparisons between employee compensation and non-employee compensation that I did.

    An unbiased article would have also gone into the debt loading of Hostess by the "investors" who paid themselves excessive management fees the company could not afford by incuring debt at the expense of worsening the health of the company.

    An well researched article would also have spent the time to hear directly from Frank Hurt, the union spokesman for Hostess' bakers, not just investors and management viewpoints.

    Fair and balanced is pretty far to the left of today, and has been for a very long time.

    So is honest.

    Best wishes,

    Steven

  • Report this Comment On November 26, 2012, at 8:44 PM, WD562 wrote:

    A wonderful article. It is idiocy to turn Thanksgiving into another shopping day. There are some things more important than money and money is certainly not so important that it is worth the erosion of family time and the purpose of Thanksgiving. If Thanksgiving is to become another shopping day then perhaps it should be abolished as a holiday. Businesses have a choice and really should pull back and let Thanksgiving stay the day it was intended to be.

  • Report this Comment On November 27, 2012, at 10:01 AM, TMFLomax wrote:

    Hi everyone,

    Thanks very much for the thoughts and discussion here. Obviously people feel very passionately about the topic.

    I do find it interesting that I am being accused of being biased on both sides of the fence here. Actually, I believe my article is pointing out that in many cases, there isn't really a "good guy" in the battle between corporate managements (and some carrion investors) and unions. By the way, of the 19,000 Hostess workers affected by the current situation, only a minority were actually unionized, according to data I saw. I wonder how those other workers feel about it?

    So maybe we're all a little biased in our views but can listen to other points of view. For example, Steven, I appreciated the data that you supplied to make for a more robust conversation. Seriously, I did. However, I'm not sure why you came back a second time to accuse me of dishonesty. I can't always write the article that everyone wants to read, and I'm not particularly of the opinion that that is a good idea. You're free to point out flaws in my reasoning, but please. The point I was trying to make is that stakeholder value is an idea -- and choice -- more companies and investors should acknowledge, without these major economic distortions and disruptions caused by overpaid managements or unreasonable, unsustainable union demands (or both in tangent, which can and does happen, and kills the proverbial goose).

    At any rate, I'm glad that so many people chimed in on this issue. I am listening. And regardless of anything else, whether we disagree or have common ground on this topic or not, I hope everyone had a nice Thanksgiving.

    Best,

    Alyce

  • Report this Comment On November 27, 2012, at 3:49 PM, devoish wrote:

    Hi Alyce,

    After I re-read the last reply I made, I did not like the comment I made about honesty either but I did not have time to write another reply at the time.

    As soon as I read it I saw that it read like I was accusing you of dishonesty. I do not think you are dishonest. I do think the article is biased and lacking adequate research.

    There is clearly a campaign in the replies to TMF articles to describe anything to the political left of 'extreme anti employee' as liberal or biased left.

    I do not believe it is 'honest' opinion and obviously haven't for a long time. I believe it is loosely organised political campaigning and purposely dishonest.

    best wishes,

    Steven

  • Report this Comment On November 27, 2012, at 4:17 PM, TMFLomax wrote:

    Hi Steven,

    OK, I understand now. I think you and I share dismay that many discussions these days are so politicized that anybody who doesn't share the same opinion is often accused as being an "extremist" on the other side. That's not actually conversation or even particularly productive.

    As for my article, I am sorry to have disappointed you and fallen short on what you expected. You and I have both been around the Fool community for a long time, and folks like you help reveal all perspectives and points of view, so thank you for that!

    Thanks for responding!

    Best,

    Alyce

  • Report this Comment On November 27, 2012, at 10:16 PM, devoish wrote:

    Alyce,

    To me the linked article, which won't pass the TMF profanity filters, is honest and accurate, if not polite discourse.

    And it is honest and accurate that matters, not moderate or centered.

    Two plus two is four. Someone claiming six, doesn't make five correct.

    I think the bias comes from trying to squeeze economic reasoning into everything. Economics is not a good tool to guide a country with.

    http://rudepundit.blogspot.com/2012/11/photos-that-make-rude...

    Best wishes,

    Steven

  • Report this Comment On November 29, 2012, at 2:14 PM, SkepikI wrote:

    hmmm juxtapose "honest and accurate" with "Economics is not a good tool to guide a country with" hard to tell if its irony or honesty. Maybe "economics as currently practiced" is conflicting with honest and accurate. Certainly political thought with no regard for economics (real hard data and statistically significant research) is in conflict with honesty and accuracy. "Squeeze economic reasoning into everything"? Possibly a fault, particularly when the reasoning is flawed or the data is noise instead of fundamental truth. Abandon it entirely? the road to ruin. Tested and found to be true on numerous occasions in the last two centuries. No matter what you think about the vagaries of money and economics, how it is formed, spent and exchanged, we have yet to come up with a better way to measure human effort, resources and value. And, every time we tried something else its a disaster.

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