viernes, 27 de noviembre de 2015

Mauro Libi Crestani: Share Value, save money and live better

By Mauro Libi Crestani: The Corporate world has often been criticized for it’s drive toward profit even if it meant that it would come at society’s expense.

”Save Money, Live Better”. That’s Wal-Mart’s slogan, but Wal-Mart workers themselves certainly wouldn’t say that they live better after beginning employment with the retail giant. A 2005 study found that Wal-Mart reduced the take-home pay of workers by an astounding $4.7 billion dollars annually, adding insult to injury considering that workers are often forced to work overtime for zero pay. Wal-Mart does everything it can to deny its workers basic rights, spending an enormous amount of time and money keeping unions out including $7,000 anti-union camera packages, $30,000 undercover spy vans, $100,000 24-hour anti-union hotlines and a $7,000,000 rapid response team with a corporate jet. 

The Walmart story above is from 2005. It is understandable. Corporations are in business to make money. They are responsible to their stockholders. The botten line is the reason that it exist. The company may do charity. They may set up foundations. The charity may go into the tens of millions of dollars.

Now comes along the concept of shared value. Share value is where a company finds a way to help society while at the same time, it’s profit goes up as a result. Do not get me wrong. Companies and society do not share their values according to their concept. Companies are in business to profit and society needs help.  Societies problems may include poverty, pollution , crime, disease and the list goes on and on. Corporations are not in business to solve these problems. Share Value Initiative is a concept that by helping solve some fo these problems that company will make money. It is the old concept of killing two birds with one stone.

Walmart decided to raise it’s employees pay. In the past this would have been considered a bad business decision. With the concept of Share Value that type of thinking has changed.
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Walmart, the world’s largest retailer, will raise its base hourly wage to $9 beginning in April 2015. By the following February, all employees will make at least $10 an hour. That’s $2.75 above the federal minimum wage of $7.25, which hasn’t budged since 2009, and it’s close to the $10.10 minimum wage proposed by President Obama. About 500,000 Walmart workers will get a raise as a result of the change.
Walmart’s stock fell by 3% right away. However, Walmart is not investing for the short-term. There is the potential for a direct increase in sales from all those Walmart associates earning more. Walmart is the largest employer in many of the regions where it operates stores. Burtless points out that the pay hike “will have a tangible effect on those local economies and most of those benefits will accrue to Walmart.” – Share value, by Mauro Libi Crestani.

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