Money, Not Unlike Energy, Is Neither Created Nor Destroyed

The First Law of Thermodynamics teaches us that energy is neither created nor destroyed. It may be converted from one form to another, recall E=MC^2. Walmart founded by the late Sam Walton (March 29, 1918 – April 5, 1992) was an American businessman as well as entrepreneur and is well known for founding both Walmart and Sam's Club.

My maternal grandfather, R. C. M. Kraabel was a JC Penney Store man at the same time as Sam Walton; the two men were well acquainted. Rolph Clarence Milton Kraabel operated the JC Penney Store in Decatur, Illinois, from the 1930's through his retirement in 1956. Sam Walton was with JC Penney in 1940-1941. Both Rolph and Sam believed that the customers' business made or broke the business. Both strove to build their customers' satisfaction with the right goods at the right time of year with the right prices.

Big box stores have taken sustained beatings from many years from Amazon and other on-line retailers who don't have the brick and mortar overhead of Walmart, Sam's Club, JC Penney or others. Profit margins for such big box stores is extremely thin if not of the ether. Oceans of red ink, a veritable red tide has erupted with numerous closing of many flavors of big box retailer stores nationwide.

When Walmart recently announced raises in minimum wages for its employees, this announcement made me take immediate notice! From where would the big box retailer Walmart squeeze the money to pay such higher wages? Suddenly, the other shoe dropped! Walmart announced the immediate closing of more than 50 Sam's Clubs across the United States. Watch for more closings.

Sudden and/or significant increases in wages, whether minimum wages or otherwise, drive the economy in the direction of inflation. Loss of jobs at Sam's Clubs, coupled with eventual inflation from higher wages at Walmart (an industry leader) and others will inevitably result in higher inflation, higher prices and higher unemployment for many such workers often with modest skill sets.

Increases in minimum wages uncoupled from higher expectations of skills and/or productivity of these paid workers is unsustainable and eventually hurts the very people such increases ostensibly were meant to assist.

The money for higher minimum wages might well be better spent on worker training so as to increase the worker's value to the employer and in turn command higher wages or salary based on a quid pro quo arrangement of increased pay for increased value to the company.

As workers' compensation premiums are closely tied to salary and wages, these premiums will increase to the benefit of none.

All paid employees should be required to take continuing education courses to keep up and perhaps get ahead of the curve. Payment for such courses instead of raising minimum wages is a prudent use of such precious dollars.

What does that have to do with the price of tea in China? Everything!