I guess, in honor of Labor Day, Forbes Business Magazine just published a piece about how the American business model is changing, with most of the change about how they intend to hire, pay and manage employment.
As an example, Walmart is planning to implement an employment plan closer to how Costco hires and manages their employees. The idea is to hire higher quality employees, spend more time in training them, and pay them a higher salary.
The rationale behind this tact is that, by hiring better educated, more motivate people you increase employee productivity, reduce personnel turnover, and increase "sales per employee". The Costco model says each of their employees generate $250,000 dollars per employee, per year, per store, far more than the typical Walmart high school drop out or marginal worker. Of course the big "gotcha" in this is that Walmart and other American businesses will be able to hire fewer employees because they are hiring a better educated, better trained worker.
I have some serious doubts that this will work out for Walmart, for the simple reason that, when you look at who shops at Walmart, and who shops at Costco, you see a big difference in customer demographics. I've read before that, were it not for the Food Stamp program, Walmart wouldn't make a dime in profits. But then I'm not a business guru so maybe the new model would succeed in drawing in a higher class of customer. But, to do so, you'd have to filter folks at the front door of Walmart and ban bikinis and pajamas and plus size ladies wearing petite size clothing. Barring that I'm not seeing a Nordstrom's shopper setting their foot in a Walmart store.
But Walmart is not alone in the pursuit of a better employee business model. Under assault from the $15 dollar per hour demands of the Occupier crowd fast food franchises are seriously consider going to automated ordering kiosks and eliminating the near comatose high school dropouts currently managing the order counter. And they figure if they can hire someone with an IQ above 100 they just might be able to hire fewer burger flippers and assemblers.
Of course this innovative new employee business model, while it may be better, and more profitable for business, leaves the $64,000 dollar question. What do we then do with the millions of the mentally challenged high school dropouts who won't be able to score a job with either Walmart or McDonalds?
How much more will taxpayers have to shell out for serial breeding welfare moms? How many more University Philosophy majors will we have to support with food stamps and student loan forgiveness?
The only way out of this as I see it is to ship our societal offal to China, or Mexico, or elsewhere in South America. China has been buying up American food companies such as Smithfield Foods. Kraft is now owned by a South American hedge fund manager. Maybe we can contract with Disney or Carnival Cruise lines and ship our high school failures, 5,000 at a time, to sweat shops in China and Mexico and Rio.
One thing for sure...when they come back from those places they damn sure wouldn't be demanding $15 an hour to flip and assemble a Whopper!