General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsCleita
(75,480 posts)What raised prices is a rise in the wholesale price. When retail business gets a raise in price from the wholesaler, the retail price will reflect it and it will be passed on to the consumer. Businesses can remain competitive with each other because they will also raise their prices. However, wages are a fuzzier area, so minimum wage can go up but you won't see it reflected in the price of your latte for the same reason that those companies in competition with each other have to reflect similar prices although one company might pay far better than another. One might be union and another not and so on.
Rises in price doesn't affect fixed costs such as employees wages.
demwing
(16,916 posts)Regardless of the reality.
Cleita
(75,480 posts)Wal-Mart to raise their prices. People will stop shopping there and go to CostCo.
demwing
(16,916 posts)you see people raising prices and blaming ANYTHING:
Not that it works so well, but it happens. For economic reasons, or political. It happens. People will raise prices to protest a minimum wage increase, because socialism.
lonestarnot
(77,097 posts)BlueJazz
(25,348 posts)Mnemosyne
(21,363 posts)WillyT
(72,631 posts)IndyPragmatist123
(42 posts)This could easily be countered by pointing out membership fees by someone who doesn't want to bring economics into the discussion. If you actually want to use economics, you would realize that wages and prices are much more complex than a screen grab of two businesses with incredibly different business models.
But, I guess people just want to dumb things down. Who cares if you have no clue what you are talking about, as long as you are right.
trof
(54,256 posts)SomethingFishy
(4,876 posts)Yeah you pay a fee. I pay $100 a year. And for that I get a check at the end of the year for 2% of my total purchases. I usually get a check for around $300. Pays for my membership and I get about $200 in free groceries every year.
But hey don't let that stop you from using "membership fees" to "easily counter".
Costco craps all over Wal-Mart. Prices, Customer Service, Employee Compensation.. Seems that "ignorance" is a common commodity here.
Duer 157099
(17,742 posts)Costco is awesome. WalMart sucks. I have both in my town. I've been in WalMart once in a decade. Costco, once a week.
demwing
(16,916 posts)What did Indy write?
"Who cares if you have no clue what you are talking about, as long as you are right."
Hey...what you said.
krawhitham
(4,644 posts)SomethingFishy
(4,876 posts)They eat a lot.
IndyPragmatist123
(42 posts)I know plenty about their business model. And they make plenty of money off of low usage members that do not get their rebates. Maybe you should look at their contracts with suppliers and you might get a better idea of how the business is run. It's quite interesting. You should learn about it sometime.
progressoid
(49,991 posts)Their business model has given the Walton Family as much wealth as the bottom 40 percent of Americans combined.
http://thinkprogress.org/economy/2012/07/17/534591/walmart-heirs-wealth-combined/
Walmart Director, President and Chief Executive Officer, Michael T. Duke's compensation last year was 18,131,738.
http://insiders.morningstar.com/trading/executive-compensation.action?t=WMT
Where as Costco CEO Sinegal, who no doubt has become wealthy through Costco, makes about a third the pay of an average CEO. His salary is $350,000 a year. His total take-home pay amounted to about $3.5 million in 2010, far smaller than the median $9.3 million.
http://www.washingtonpost.com/blogs/post-leadership/post/costco-ceo-jim-sinegal-checks-out/2011/04/01/gIQAh7CqwJ_blog.html
davidn3600
(6,342 posts)Costco and other membership-based retailers like BJ's and Sams are going to typically have cheaper prices than your typical retailers because: 1) There is a membership fee. 2) You are buying a lot of items in bulk which comes cheaper from manufacturers/distributors. So that combination keeps the overall prices lower. And yes, if you shop wisely you can easily recoup your membership fee.
Im not arguing that Wal-Mart is better than Costco in any way. Im just pointing out there is a difference in how each does their business.
OldDem2012
(3,526 posts)angstlessk
(11,862 posts)try again..with real numbers
mbperrin
(7,672 posts)If cost increases could be recovered through price increases, no business would worry about cost increases.
Fact is, prices are determined in the market by the intersection of supply and demand.
Business can either make a profit with market prices, or not. If not, they should leave the market. They're not good enough nor efficient enough to deserve to be in business with those who are.
AGGREGATE wages do however, increase the size of markets, creating bigger GDP, viewed by economists as a favorable outcome.
See, if HIGHER wages were BAD, bank executives would refuse those huge bonuses that they get as regular as clockwork. And bosses would refuse to take raises. But they don't.
Theory and practice meld perfectly in this case, making an economic resonance that I can hear from here.
(Break into "The Hills Are Alive...."
NoGOPZone
(2,971 posts)than worn out talking points like "Raising the minimum wage will raise prices!"
laundry_queen
(8,646 posts)econ 101 people.
airplaneman
(1,239 posts)Amlodipin 2.5 mg x 30 tablets
WalMart: $29.95
Costco: $8.82
Some people believe WalMart is a good deal all the time.
-Airplane
Mnemosyne
(21,363 posts)Because they tell us so in their commercials!
ZRT2209
(1,357 posts)That is exactly the example I use with my students to prove that low wages do NOT benefit the economy.
Even they, 17 years old, recognize that slave labor would not make things cheaper. It just creates slaves.
Spitfire of ATJ
(32,723 posts)My fiancee LOVES it.
Meanwhile,...I brought this with me:
She uses powdered creamer.
I use whipping cream.
She uses pods.
I grind fresh just before use.
Her's tastes like weak instant.
Mine can strip paint off an engine block.
taught_me_patience
(5,477 posts)without seeing the dates for the screenshots, this is a useless comparison.
Contrary1
(12,629 posts)JaneyVee
(19,877 posts)riverbendviewgal
(4,253 posts)and we have them up here.
Target opened up this week in some places in Canada. Canadians noticed the prices are not as cheap as in the states..
Well, one reason could be there is decent minimum wage here and also all of us have health care.
Delmette
(522 posts)It's the price (salary, stock options) of the CEO, CFO,COO and what ever else they want to call the greedy people at the top of their organization.
glinda
(14,807 posts)lonestarnot
(77,097 posts)victims.
pampango
(24,692 posts)"At Costco, we know that paying employees good wages makes good sense for business," Jelinek said in a statement. "We pay a starting hourly wage of $11.50 in all states where we do business, and we are still able to keep our overhead costs low."
"An important reason for the success of Costcos business model is the attraction and retention of great employees," Jelinek added. "Instead of minimizing wages, we know it's a lot more profitable in the long term to minimize employee turnover and maximize employee productivity, commitment and loyalty. We support efforts to increase the federal minimum wage."
http://www.democraticunderground.com/10022470980
reformist2
(9,841 posts)as the increase in wages. It will tend to lower profit margins, which means lower bonuses for those on the top. I can live with that. But we ought to be mindful of what this does to people in the middle, who don't get the wage increase but still have to pay the slightly higher prices that result from it.