The good news was Wal-Mart raising its hourly wages due to political pressure and sometimes new State laws – such as in California and many others to $11/hour. It also handed out employee bonuses due to tax reform (tax cuts).
Then the bad news came: Wal-Mart abruptly laying off thousands of workers and closing 63 Sam’s Clubs across the U.S.
Wal-Mart was quick to put out massive PR about raising the starting hourly wages to $11/hour, expanding employee benefits and offering worker bonuses of up to $1000 in response to the Trump tax cuts…
However, there’s a twist: On the very same day, they were much more discreet about the news that they were also closing hundreds of Sam’s Club stores nationwide and laying off thousands of workers, as reported by numerous media outlets.
Why?
Raising the minimum wage to $11 per hour for all workers starting out may seem like a positive change, but it triggers a ripple effect that isn’t often discussed in mainstream media like CNN or elsewhere. To understand the full impact, you’d need to speak with owners of medium or large companies.
Initially, they might chuckle at the idea of workers being paid “a living wage.” However, behind closed doors, the truth emerges without microphones or cameras capturing the conversation.
When you pay everyone just starting out eleven bucks an hour – what about the person who’s been on the job for a couple years, working hard, playing by the rules, showing up on time – DOING THEIR JOB – and just got a raise from $10 to $11 per hour?
Do you really think they’re going to stand by and grin when someone with no experience, no training, and perhaps even no work ethic receives the same pay?
Nope. The owner has to bump up their wages. Let’s say, to $15 per hour and you know what’s next. The loyal, super-experienced people on the job for 5 years knocking it out are not going to stand for that – so they must get a raise and so on and so forth up the ladder until…. guess what?
Yep – layoffs. Store closures. Mechanical checkout machines (god I hate those things) and people on the lowest end of the chain are the ones getting hurt.
So the next time you hear about how wonderful it is when the government tells businesses what they need to do to assist low-wage workers, just chuckle. They really don’t have a clue about the reality—mandatory minimum wage increases actually harm the lowest-paid employees. Just look at the 63 closed stores and the thousands of people completely out of a job as evidence.
And before you say “why don’t the CEO’s take a pay cut????” – let me tell you most of their pay is tied to company performance in the way of stock options and besides – these companies have to compete in the global market. They MUST compete for the best management to run the company in order to win.
If you don’t understand this, then you probably haven’t operated a business yourself. Sorry, but you need to mature and consider who is taking the financial risk and who isn’t. If you get laid off, you can find another job. But when a business shuts down, someone’s entire investment is lost. Are you going to help reimburse them? Of course not—you’ll just continue complaining about minimum wage.
Anyway,
Jessica Buckner, an audit team lead at a Sam’s Club location in Anchorage, revealed to local TV station KTVA that all Alaska stores are shutting down as part of a broader downsizing across the U.S. “From what I heard, there’s over 260 stores that have been closed down,” she stated, according to CBS News.
The official closure date for the wholesale clubs is January 26th, Buckner added.
Shortly after, the company issued a statement, stating that the number of stores for closure is somewhat lower, at 63, if still a sizable number.
That’s a stark contrast to the five wholesale club stores the company has shut down since fiscal 2013, as per securities filings.
According to a spokesperson, ten to twelve of the closed stores might be repurposed as e-commerce facilities. This development aligns with Sam’s Club’s ongoing strategy to optimize its stores for fulfilling more online orders, aiming to compete with internet retailers like Boxed.
The closures extend to stores in New Jersey, upstate New York, Georgia, Illinois, Indiana, Ohio, Louisiana, North Carolina, Tennessee, and Texas.
In certain cases, as reported on social media, employees arrived for their shifts only to discover that their workplace was closing, with little to no advance notice provided.
The chain, which competes with Costco , has more than 650 locations employing more than 100,000 people, with an average of 175 employees per store, according to the company.
No formal announcement was made by Sam’s Club on Thursday morning, but the company did acknowledge the closures on Twitter with a general statement.
This abrupt action came shortly after Walmart’s announcement earlier on Thursday that it would increase the minimum wage for all hourly employees to $11.00 an hour. Additionally, Walmart declared plans to expand parental leave and provide some employees with one-time bonuses of up to $1,000 following the passage of the GOP tax overhaul.
The company said that membership fees at the closed locations will be refunded and that pharmacies at the closing locations will stay open for at least two weeks.
Walmart is the nation’s largest private employer, so there’s no doubt that the layoffs will have an impact on January’s jobs report, which will be released next month.