Raise Minimum Wage By Razing Big-Boxes Buy Like a [r]epublican When You Can

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Mandeville, LA – Exclusive Transcript – “Do you see how all this works, ladies and gentlemen?  You see how all this works?  The President makes phone calls.  The CEOs who are employing people part-time in franchise locations that rob local economies of the sale of local production and service and of local profits being retained – this is what you miss when you talk about the big-boxes that everyone loves so much.  It’s not just that they displace – they have buying power and all this and they give you lower prices.  One guy argued with me one time: Wal-Mart lowers your cost of living.  Maybe it does, but it also reduces and almost wipes out any chance that someone that did this locally and had done it locally could do it and therefore could retain the profits, could retain them and use them in their community.  This is important here.”  Check out today’s transcript AND Clip of The Day for the rest….

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Begin Mike Church Show Transcript

Mike:  We continue to have what I think is a silly discussion over the merits of a minimum wage and whether or not there ought to be a federal one or a state one or a local one, etc., etc.  Consider this, two days ago Wal-Mart announced that they were going to just voluntarily raise their minimum wage.  No corporation does anything voluntarily when you’re talking about giving money away.  What they actually are doing is probably trying to forestall a federal action being waged against them, which would then cause them legal expenses.  Either that, or they actually think that if they don’t raise the minimum wage that they pay entry-level employees, that some of their competition may raise theirs, and if they did, they would have to scramble to keep some of their employees and keep them loyal.

This is what is called the price mechanism, or it’s very similar to the price mechanism.  The fact that there could be some competition for wages signals, maybe, that the companies did this not out of any sense of altruism or out of Christian charity; they did it because they need to do it existentially.  If they don’t, then they run the risk of not surviving or of not surviving as profitably and as largely.  If you’re an American company, what you do is measured in how good you are, which is measured by how large you are.  Recall that if you’re small, that means bad; if you’re large, that means good.  So big companies, good; little companies, bad.  Going to the hardware store to go hang out by the hitchin’ post and talk to[private |FP-Monthly|FP-Yearly|FP-Yearly-WLK|FP-Yearly-So76|Founding Brother|Founding Father|FP-Lifetime] the people that run the hardware store, why do that when you can go to the Mega Lo Mart.  Remember Mega Lo Mart from King of the Hill?  [mocking Hank Hill] “I think I’m gonna lose my job, Peg.  A Mega Lo Mart just moved into downtown.”  Of course, Hank Hill ultimately did wind up selling propane tanks at the Mega Lo Mart.  Here’s part of the story:

[reading]

President Obama called Wal-Mart CEO Doug McMillon on Wednesday to commend him for raising employees’ wages, a move that is prompting other retailers to follow suit.

Mr. Obama phoned Mr. McMillon from Air Force One on his way to Miami, where he was holding a town-hall-style meeting on the immigration issue. The president also renewed his call for Congress to raise the federal minimum wage.

[end reading]

Mike:  Folks, you shouldn’t be so naïve as to think that the CEO of Wal-Mart just woke up one morning and went: I think I’m going to raise the minimum wage today.  What do you think, honey?  I think you should do that, dear.  And thus it was done.  That’s preposterous.  What is far more likely is that either the president or someone with the president was visiting with and was informing the Wal-Mart CEO: Dude, if you don’t do it, he’s going to ask Congress to do it.  When Congress refuses, he’s just going to issue an executive order and do it himself.  Then he’s going to embarrass you and cost you sales.  You might as well just do it and you can be a good guy.  That’s how this probably went down.  I’m theorizing here, but knowing what I know about human nature, it makes total sense.

[reading]

Wal-Mart Stores Inc. said last week that it will raise pay to at least $9 an hour by April and $10 by February. The White House cited a move by TJK Cos., which owns T.J. Maxx, Marshalls and Home Goods, to raise wages by June as a sign of momentum for boosting pay above minimum wage.

Seventeen states, as well as cities and corporations, “have acted to make a meaningful difference in the lives of seven million Americans since the president’s call to raise the federal minimum wage in his 2013 State of the Union,” the White House said.

[end reading]

Mike:  Is that really what happened, or was there something else at play here?  If we go to Bloomberg – and these people report on business matters – we might find a bit of a different story.  Bloomberg says:

[reading]

T.J. Maxx, Marshalls and other chains owned by TJX Cos. will be increasing the pay of U.S. workers to at least $9 an hour beginning in June. That matches the level adopted by Wal-Mart Stores Inc. earlier this month . . .

The move signals that the labor market is getting more competitive after a slow recovery from the recession.

[end reading]

Mike:  No, what it signals is that more people are seeking minimum-wage work.  That’s what it signals.  What it also signals is that minimum-wage work is, by and large, part-time work.  It means that there’s more part-time work to be held, and there’s still a dearth, there’s still a barren wasteland if you’re out there looking for fulltime employment.  Remember, without anyone ever voting on it, the United States Congress, in cahoots with the big monopoly-making mega corporations, decided that we didn’t need a manufacturing economy any longer.  What we needed was what they call a service-oriented economy: waiters, waitresses, stock brokers, people that sit around offices doing nothing all day long but making AT&T commercials, hanging out by the water cooler, and playing air guitar on their smartphones.  That’s the kind of business that we need.  We’re seeing the ultimate in results of this.

[reading]

Pay hikes will help employers lower turnover and reduce hiring and training costs, said Brian Yarbrough, an analyst at Edward Jones in St. Louis. It’s an approach Costco Wholesale Corp. and other successful retailers have already adopted.

“This is the way retailers need to go,” said Yarbrough, who has a buy rating on TJX’s shares. “Some of the best performers already pay higher wages.”

[end reading]

Mike:  Do you see how all this works, ladies and gentlemen?  You see how all this works?  The President makes phone calls.  The CEOs who are employing people part-time in franchise locations that rob local economies of the sale of local production and service and of local profits being retained – this is what you miss when you talk about the big-boxes that everyone loves so much.  It’s not just that they displace – they have buying power and all this and they give you lower prices.  One guy argued with me one time: Wal-Mart lowers your cost of living.  Maybe it does, but it also reduces and almost wipes out any chance that someone that did this locally and had done it locally could do it and therefore could retain the profits, could retain them and use them in their community.  This is important here.  This used to just happen.  It’s more and more rare now.  I think people are starting to catch onto this, and that is that if you have an option here – the way to fight the big-box is not to give glorious speeches about it.  It’s not to do all the theories or petition signing campaigns and all that.  Forget all that nonsense.  You’re going to get nowhere with it anyway.  They’ve got all the money in the world.  They’ll out-lawyer you and you’ll lose.

The way to fight the big-box is just by being a communitarian, being a republican, being a good Christian.  If you know that John and Jane are running a little store and they sell something you can actually get at the big-box, and yeah, you may have to pay an extra buck for it.  So what?  Take the buck from the Netflix bill.  I won’t watch as many movies.  I’ll reduce my Netflix from three to two, whatever the case may be.  The way to fight the big-box is to fight them like Front Porch Republic suggests, that is to buy local, shop local, construct local whenever you have the opportunity.  This is not hard to figure out.  Sooner or later, the big-boxes will start closing up.

Folks, I don’t know if you notice this, but I have to be careful how I say this because I don’t want to come across as being – I’m not an enemy of franchising.  Everything has to have some sort of a limit, or you would think things like franchising would have limits.  Apparently franchising doesn’t have limits.  With all the little retail centers that pop up all over the amber waves of fuel, we see they’re usually filled with franchises.  Please, let me finish the point.  Again, it’s not that I have a chip on my shoulder about franchises; I don’t.

Who is to say that the person that runs – Drew Brees, for example, owns a Jimmy John’s sandwich shop.  Let me ask the question.  Drew Brees is one of the most famous men in all of Louisiana.  He may be one of the most famous football players in all the United States.  What does Drew Brees need a franchise for?  He is a franchise.  What’s wrong with Drew Brees’ po’ boys?  I don’t really want to learn to make sandwiches, though.  I like throwing footballs, man.  I have no interest in making really good breads and getting to know my customers.  There’s more to the franchise mentality and to the obsession that some people have with the franchise mentality than meets the eye.[/private]

There are franchisees that are in their businesses because they love what they do.  They love their customers and they love being in business.  The franchise just cut out some of the legwork and maybe made it less expensive for them to get into that particular business.  There’s nothing wrong with that.  I’m not saying that there is.  There’s no need to call and argue with me.  I’m not arguing against franchises.  I’m simply asserting here that many of what is done with franchise, you people that love to do what you’re doing, you can do it yourself.  The franchise affords you the opportunity from time to time to, as I said, mitigate some of your expenses.  That’s why it’s done.  Again, there’s nothing wrong with mitigating your expenses.  Again, if you want to fight the big-box retailer mentality, then you’re going to have to fight franchise mentality.  I believe they come from the same wellspring.

I don’t buy any of this and I’m not giving any credit to these guys that are raising wages.  If you wanted to raise wages, then you would have some kind of policy that would say: We only wish to operate x-amount of stores as our little corporation, and that’s all the amount of stores that we wish to operate.  When is enough enough?  In the United States with our franchising mentality, enough it never enough.  There is no such thing as enough, unless we confront, at least tangentially, the issue of usury.  It is an issue.

End Mike Church Show Transcript