news 4 days ago

The Week Ahead: Profits, pay and tariffs

Miami Herald — By Tom Hudson Miami Herald

Nov. 08-- The largest private employer in America is due with its latest financial results in the week ahead. This same company also is one of the biggest sellers of items made in China.

Walmart employs as many Americans as there are people living in both Dakotas-about 1.5 million people.

Walmart's starting wage is $11 an hour. That was raised earlier this year, but it remains below the median pay for a retail worker, according to the Bureau of Labor Statistics. The store also expanded family leave and added a benefit helping workers with adoption expenses. It remains a target of critics over its pay practices.

The company's profit margin hovers around 4 percent. And Walmart has pledged to protect its profits even as it raises starting pay. In October, the company told investors it is changing the role of store workers "so that we maintain the shape of the P&L"-the profit and loss statement.

Retailers are feeling the pay pressures brought on by a tight job market. Those pressures continue into the holiday season as stores compete for seasonal workers. While the pay changes have added to its business expenses, it has not hurt shareholders. Walmart stock is up 6 percent this year. Walmart releases its latest quarterly results on Thursday.

At that same October investor conference, the company also said it was "actively working to minimize any impact on our customers and our shareholders" from tariffs. It said it would raise prices because of tariffs in some environments.

A month earlier, the store worried that scores of items it sold would be touched by the trade tariffs on Chinese-made goods by the Trump Administration. Bicycles, drinks, shampoo, hand tools, furniture, dog leashes, calculators and Christmas lights were listed in a letter to the U.S. Trade Representative as some of the items that would be impacted. Nine days later the tariffs were imposed.

Just as investors will be examining Walmart's profits, so too, should they look at their pay and price patterns.



Financial journalist Tom Hudson hosts "The Sunshine Economy" on WLRN-FM in Miami, where he is the vice president of news. He is the former co-anchor and managing editor of "Nightly Business Report" on public television. Follow him on Twitter @HudsonsView.


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