Why Amazon Is on a Warehouse Building Spree

For a company whose showrooms are all online, Amazon.com (AMZN) spends a staggering amount on bricks and mortar. The e-commerce giant has invested roughly $13.9 billion since 2010 to build 50 new warehouses, more than it had cumulatively spent on storage facilities since its 1994 founding, bringing the total to 89 at the end of 2012.

(It’s announced five more in the U.S. this year.) Amazon aims to be able to deliver most items the day they’re ordered, so it can keep rivals such as EBay (EBAY) and Wal-Mart Stores (WMT) from peeling off customers. EBay offers same-day delivery in some cities, and Wal-Mart is moving more sales online.

“What Wal-Mart and EBay are working on is, can they be faster than Amazon?” says Wells Fargo (WFC) analyst Matt Nemer. “It might not be the highest-margin sale in the world, but they can potentially get something to you in an hour.”

Amazon introduced its expedited-shipping program, Prime, in 2005. Prime offers two-day service for $79 a year, plus $3.99 or more per order for same-day or one-day delivery; non-Prime Amazon customers pay $8.99 and up for same-day delivery. But Amazon can’t guarantee top speed for most items or locations. Read more >>

Walmart is even worse than you think

Almost 30 years ago, as the U.S. was bleeding jobs, Walmart launched a "Buy America" program and started hanging "Made in America" signs in its 750 stores.  It was a marketing success, cementing the retailer's popularity in the country's struggling, blue-collar heartland.  A few years later, NBC's Dateline revealed the program to be a sham.  Sure, Walmart was willing to buy U.S.-made goods — so long as they were as cheap as imports, which, of course, they weren't.  Dateline found that Walmart's sourcing was in fact rapidly shifting to Asia.

This year, Walmart is back with a new "Buy America" program.  In January, the company announced that it would purchase an additional $50 billion worth of domestic goods over the next decade.  This week, Walmart is convening several hundred suppliers, along with a handful of governors, for a summit on U.S. manufacturing .

This sounds pretty substantial, but in fact it's just a more sophisticated and media savvy version of Walmart's hollow 1980s Buy America campaign.  For starters, $50 billion over a decade may sound huge at first, but measured against Walmart's galactic size, it's not.  An additional $5 billion a year amounts to only 1.5 percent of what Walmart currently spends on inventory. Read more >>

Walmart Threatens To Pull Out Of D.C. Over Minimum Wage

On Tuesday afternoon, Walmart officials, lobbyists, and an upper executive paid a visit to the Washington D.C. Council. What could bring out the muscle of the world's largest retailer? The prospect of a raised minimum wage.

As The Washington Post reports, D.C. Council members are voting Wednesday on a bill that would demand mega-retailers pay their employees at least $12.50 an hour, with Walmart the clear target.

Walmart, which pays its hourly associates an average of $8.84 an hour, according to Glassdoor, threatened to stop at least three of the six planned Walmart stores from opening in the city if the bill succeeded, forcing the council to decide: Are no new Walmart jobs better than poorly paid ones?

In a Post op-ed published Tuesday, Walmart regional general manager Alex Barron called the bill "an eleventh-hour effort" that is "arbitrary and discriminatory" and "discourages investment in Washington."

Update, 07/10/13, 5.50 p.m. EDT: The city council passed the bill by a vote of 8 to 5. It is now headed to the desk of the mayor, who has indicated that he may veto it.

The ultimatum was "immensely discouraging," Mayor Vincent C. Gray told the Post, since six new stores -- three of them already under construction -- that Walmart is planning would employ 1,800 people, bringing needed jobs, cash, affordable retail, and fresh produce to the capital's poorer neighborhoods. Barron said even the three stores underway could be scrapped if the bill becomes law, pending a review of "financial and legal implications." Read more >>

America's second-largest employer is a temp agency

Behind Wal-Mart, the second-largest employer in America is Kelly Services, a temporary work provider.

Friday's disappointing jobs report showed that part-time jobs are at an all-time high, with 28 million Americans now working part-time. The report also showed another disturbing fact: There are now a record number of Americans with temporary jobs.

Approximately 2.7 million, in fact. And the trend has been growing.

In the first quarter of 2013, U.S. staffing companies employed an average of 2.86 million temporary and contract workers, or 2 percent of all non-farm employment in the United States, according to the American Staffing Association. This represents a 2.9 percent growth from the same period in 2012. For just the month of June, there was a 6.7 percent growth in the number of staffing jobs than last year.

Temp jobs made up about 10 percent of the jobs lost during the Great Recession, and because of high turnover (the average length of temp employment is 3 months before a worker moves on to a permanent job), one in 10 non-farm workers were employed by a US staffing firm at some point during the past year, according to ASA. In fact, nearly one-fifth of all jobs gained since the recession ended have been temporary. Read more >>

Temporary jobs becoming a permanent fixture

Hiring is exploding in the one corner of the U.S. economy where few want to be hired: temporary work.

From Wal-Mart to General Motors to PepsiCo, companies are increasingly turning to temps and to a much larger universe of freelancers, contract workers and consultants. Combined, these workers number nearly 17 million people who have only tenuous ties to the companies that pay them — about 12% of everyone with a job.

Hiring is always healthy for an economy. Yet the rise in temp and contract work shows that many employers aren't willing to hire for the long run.

The number of temps has jumped more than 50% since the recession ended four years ago to nearly 2.7 million — the most on government records dating to 1990. In no other sector has hiring come close.

Driving the trend are lingering uncertainty about the economy and employers' desire for more flexibility in matching their payrolls to their revenue. Some employers have also sought to sidestep the new health care law's rule that they provide medical coverage for permanent workers. Last week, though, the Obama administration delayed that provision of the law for a year. Read more >>

Poverty in America: Millions of families too broke for bank accounts

Sabino Fuentes-Sanchez hid $25,000 all around his house because he didn't trust banks. Lasonia Christon receives her Wal-Mart salary on a pre-paid debit card. Kim James was homeless for most of the past decade in part because she had no place to save money.

There are plenty of reasons people still live all-cash lives, but the sheer number who do it might surprise you. At a time when the majority of Americans use online banking, and some even deposit checks using their cellphone cameras, roughly eight percent of America's 115 million households don’t have a checking or savings account, according to census data compiled by the FDIC.

The numbers are far higher among minorities: More than 20 percent of African-Americans and Hispanics are essentially left out of the American banking system.

Frozen in the cash-only past, they face myriad “kick-them-while-they-are-down” situations where getting money costs money. Banks typically charge $6 to cash checks. Want to secure an apartment? Fee-based money orders are the only option. Without credit cards, they must turn to triple-digit interest rate payday loans for emergencies. Read more >>

Store owner arrested for using food stamps to stock shelves

A convenience store owner in Daytona Beach, Fla.was arrested Monday for running a food stamp scam, using tax dollars to stock his shelves.

Bassam Abu Diab and his son Matthew were buying food stamp cards for 20 to 40 cents on the dollar and using them to shop at Walmart and Save-A-Lot stores for items they sold in their convenience store, police said, according the Daytona Beach News-Journal.

An undercover agent sold EBT cards to Abu Diab, which he used to purchase items at other stores and then paid the agent less than half the value of the cards. Federal, state and local officers raided the Abu Diabs’ 4M Food Mart after a 3-month investigation.

“This guy is running a business on the taxpayers back,” said Daytona Beach Police Chief Michael Chitwood, according to local tv station WFTV Channel 9. “It’s a fraud. He’s unscrupulous and clearly he didn’t learn from the last time we hit the store.” Read more >>

Customers Flee Wal-Mart Empty Shelves for Target, Costco

Margaret Hancock has long considered the local Wal-Mart Stores Inc. (WMT) superstore her one- stop shopping destination. No longer.

During recent visits, the retired accountant from Newark, Delaware, says she failed to find more than a dozen basic items, including certain types of face cream, cold medicine, bandages, mouthwash, hangers, lamps and fabrics.

The cosmetics section “looked like someone raided it,” said Hancock, 63.
Wal-Mart’s loss was a gain for Kohl’s Corp. (KSS), Safeway Inc. (SWY), Target Corp. (TGT) and Walgreen Co. (WAG) -- the chains Hancock hit for the items she couldn’t find at Wal-Mart.
“If it’s not on the shelf, I can’t buy it,” she said. “You hate to see a company self-destruct, but there are other places to go.”

It’s not as though the merchandise isn’t there. It’s piling up in aisles and in the back of stores because Wal-Mart doesn’t have enough bodies to restock the shelves, according to interviews with store workers. In the past five years, the world’s largest retailer added 455 U.S. Wal-Mart stores, a 13 percent increase, according to filings and the company’s website. In the same period, its total U.S. workforce, which includes Sam’s Club employees, dropped by about 20,000, or 1.4 percent. Wal-Mart employs about 1.4 million U.S. workers. Read more >>

Wal-Mart: "Families Are Adjusting To A Reduced Paycheck And Increased Gas Prices"

Wal-Mart reported a top-line miss, a bottom line beat, a dividend hike and a rather subdued full year forecast ($5.20-$5.40 on Exp. of $5.39), and nobody cared. The only thing that algos and carbon-based lifeforms alike honed in on, was the recap of the most recent 13 week period, to see if WMT was only kidding when it said that February sales, which obviously were not part of Q4 results, were a "total disaster." The reason WMT's stock is not doing to well in the pre-market is that they did not like what they found.

Here is the key section:

"We are confident that our low prices will continue to resonate, as families adjust to a reduced paycheck and increased gas prices," Simon said. "We see the underlying health of the Walmart U.S. business is sound, and sales trends are similar to what we've demonstrated in the last few quarters. However, February sales started slower than planned, due in large part, to the delay in income tax refunds. We began seeing increased tax refund check activity late last week in our stores, resulting in a more normalized weekly sales pattern for this time of the year. Due to the slower sales rate in the first few weeks of this year's first quarter, we are forecasting comp sales for the 13-week period from Jan. 26 to Apr. 26, 2013 to be around flat. We continue to monitor economic conditions that can impact our sales, such as rising fuel prices, changes in inflation and the payroll tax increase." Read more >>

Walmart plans to deny health insurance to employees working fewer than 30 hours/wk

Walmart, the nation’s largest private employer, plans to begin denying health insurance to newly hired employees who work fewer than 30 hours a week, according to a copy of the company’s policy obtained by The Huffington Post. …

Walmart declined to disclose how many of its roughly 1.4 million U.S. workers are vulnerable to losing medical insurance under its new policy. …

Labor and health care experts portrayed Walmart’s decision to exclude workers from its medical plans as an attempt to limit costs while taking advantage of the national health care reform known as Obamacare. Among the key features of Obamacare is an expansion of Medicaid, the taxpayer-financed health insurance program for poor people. Many of the Walmart workers who might be dropped from the company’s health care plans earn so little that they would qualify for the expanded Medicaid program, these experts said.

By making the fine for not providing health care cheaper than providing health care, this was always the plan: to encourage employers to send us to the government.

Remember how Obama's big ObamaCare sell was, "You get to keep the health insurance you have"?

It was all a lie, a hustle, a con, a ruse… Read more >>

Impact of low-wage work on the economy

In the wake of strikes by Walmart workers last week and fast food workers in New York City this past Thursday, the issue of low-wage work is slowly becoming more prominent. This is a timely, important and essential conversation.

Retail's Hidden Potential, a recent Demos' report about the possibility of lifting 1.5 million retail workers and their families out of poverty, provides hard evidence about the impact of low-wage work on the economy. Now a new study by researchers at Boston College and the University of Massachusetts shows the impact of parents' low-wage jobs on their children.

Analyzing over 100 different data sources, the new study, How Youth Are Put At Risk by Parents' Low-Wage Jobs, estimates that nearly 16 million U.S. families are headed by parents working low-wage jobs and that 1 in 6 adolescents alone live in such households. Read more >>

Wal-Mart Labor Protests Grow

Protests against Wal-Mart expanded on Tuesday, spreading to 28 stores in 12 states, a union spokesman said. In an effort to increase pressure on the retailer as the holiday season approaches, 88 employees at the stores missed work, the spokesman, Dan Schlademan, said.

Mr. Schlademan, director of the union-backed Making Change at Walmart campaign, added that more than 200 employees were traveling to Wal-Mart’s headquarters in Bentonville, Ark., to stage a protest on Wednesday during the company’s annual meeting with financial analysts.

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He warned that disgruntled Wal-Mart employees, joined by labor unions and community groups, might stage a combined protest and educational campaign the Friday after Thanksgiving, the traditional start of the holiday shopping season.

Mr. Schlademan said the 88 employees who missed work on Tuesday were engaged in a strike that followed what union officials said was a strike by 63 Los Angeles-area Walmart workers last Thursday. They called that the first strike ever in Wal-Mart’s 50-year history. Read more >>

Wal-Mart, Amex to Offer Alternative to Debit, Credit Cards

The two companies said Monday that Bluebird, which began during a pilot program late last year, will have no minimum balance and no monthly, annual, or overdraft fees. They said that the only fees that will be associated with the card will be transparent and within the user's control, such as out of network ATM withdrawals by consumers that don't have direct deposit.

Wal-Mart Stores and American Express view the card as an alternative to debit and checking accounts, which will help consumers better manage and control their finances. The companies say Bluebird was built on feedback from consumers, who said they were bothered by the rising fees related to checking accounts and debit services.

"Our customers tell us that they're tired of navigating a complex maze of do's and don'ts to avoid the ever growing list of fees found on checking products," Daniel Eckert, vice president of financial services for Walmart U.S., said in a statement. Read more >>

How 'Everyday Low Prices' Are Costing Americans Their Jobs

As consumers, we welcome Walmart's (WMT) low prices. But here's the thing about these low prices -- they're doing the U.S. more harm than good. A new research report has found that low prices have actually caused unemployment to rise, and dealt a massive blow to the manufacturing sector.

Look no further than the 7 million manufacturing jobs the U.S. lost from 1980 to 2011, according to a recent research report from Demos. The report acknowledges this happened because of "a variety of complex factors." But Walmart had a bigger hand in this than most of us realize.

The problem starts with Walmart's selling point: low prices. These low prices are possible both because Walmart pays its employees low wages and because the bulk of Walmart's products are sourced from foreign factories, where raw materials and labor are cheaper.

What's more, Walmart can -- and does -- use its massive size to bully American companies whose products it sells to do the same. In fact, Levi's jeans and Master Lock "were pressured to shut their U.S. factories and moved manufacturing abroad to meet Walmart's demand for low prices," Demos said. Read more >>

75% Jobs Added by U.S. Multinationals Were Overseas

 Michael Raphael (Photo credit: Wikipedia)

Thirty-five big U.S.-based multinational companies added jobs much faster than other U.S. employers in the past two years, but nearly three-fourths of those jobs were overseas, according to a Wall Street Journal analysis.

Those companies, which include Wal-Mart Stores Inc., International Paper Co., Honeywell International Inc. and United Parcel Service Inc., boosted their employment at home by 3.1%, or 113,000 jobs, between 2009 and 2011, the same rate of increase as the nation's other employers. But they also added more than 333,000 jobs in their far-flung—and faster-growing— foreign operations. More...

Waiting for midnight, hungry families on food stamps give Walmart 'enormous spike'

Image via WikipediaAt the stroke of midnight, a growing number of Americans are lining up at Walmart not to cash in on a holiday sale, but because they’re hungry. The increasing number of Americans relying on food stamps to survive the sluggish economic recovery has changed the way the largest retailer in the United States does business.

Carol Johnston, Walmart’s senior vice president of store development, said that store managers have seen an “enormous spike” in the number of consumers shopping at midnight on the first of the month. That’s typically when those receiving federal food assistance have their accounts refilled each month.

“We’ll bring in more staff to stock. We’ll also make sure all of our registers…are open…Some people may think at 12:01, Walmart’s very quiet, but in a lot of our areas of the country, 12:01 is a big day or a big night for us, actually,” Johnston said. More...