Friday, February 20, 2015

Walmart's Rising Wages

This week, Walmart announced that it is raising the wages on about 500,000 of its employees. This action brings the fund closer to removing it from our do not invest list. Some thoughts on the move:

- By doing this, Walmart policy decision makers are improving (if only slightly) their image when it comes to wages.
- This should be just a start. $9.00 an hour is not sufficient in 2015 for a company that has averaged an annual net profit of $16,000,000,000 over the last 3 years. Adding $800,000,000 ($1.00 wage at 40 hours a week) to the wage structure would not scare off investors (regardless of what CNBC talking heads say). It would actually bring new investment into the company.
- How many people will now lessen their stance on shopping at Walmart because they are now paying higher wages? How many employees can now spend more for their families at Walmart because of this raise? The fund is thinking that the raise will actually help on the top line revenue wise.  
- The raise removes some employees from the welfare system. When making $16,000,000,000 a year, a company should not have the amount of employees that Walmart has receiving welfare benefits. This move helps reduce that number. The taxpayers of KDK Fund are thankful.

As much as the raise is not as much as the fund would like to see, it is a step in the right direction.  Once some time has passed and numbers can be crunched, the company should see that they made the right decision for their employees, customers, and investors.

KDK Fund does not have any relationship with Walmart.

 **All posts on this blog are information and opinions only. They are not to be considered recommendations to buy or sell any security. Please do your due diligence first before trading and investing. Please direct all questions and comments to the blog or to or on twitter @kdkfund.

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