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The Wal-Mart Response



Wal-Mart is claiming that its decision to pay higher wages (a response to the persistent criticism of the corporation for keeping its workers in such poverty that there are food donation carts asking employees to feed their coworkers in need) is costing its stockholders 24 cents a share this quarter. I find this unlikely, but whatever. The response of Wal-Mart to this of course is then to cut the hours of these workers in order to satisfy the investors, keeping workers in poverty. Of course, a major problem is that these companies pump almost all their profits into the shareholders:

Walmart may be one of the many corporations stuck between responding to the short-term demands of Wall Street and the long-term investments that don’t pay off as quickly but can increase growth in the long run, like employee compensation. Large corporations have been spending most of their earnings on stock buybacks and dividends, which serve to boost their short-term stock prices and enrich investors. They’re expected to collectively spend $1 trillion on these moves this year. Between 2003 and 2012, buybacks and dividends consumed 91 percent of earnings, leaving just 9 percent to invest in workers, equipment, research, or other long-term investments.

Have to keep the 1% happy after all.

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