business news in context, analysis with attitude

On the subject of Winn-Dixie CEO looking for a contract extension, MNB user David Livingston wrote:

Peter Lynch better hurry up and negotiate another million dollar contract before October. Why? Because after October, the same store sales stats that he as been bragging about will face some significant challenges. It will be more than one year since Hurricane Katrina along with the closing of hundreds of low volume stores. This overpopulated many outlying areas while at the same time square footage was reduced in the marketplace. Many people are now relocating back to New Orleans where 10 Winn Dixies never reopened, FEMA has pulled the plug on the free food vouchers, the competition is eyeballing sites near any high volume Winn Dixie stores that received a windfall. It is very important that all of this be done before October before the bad news is released. My prediction is a same store sales decline in double digits.

We had a story yesterday about Whole Foods CEO John Mackey promising to spend $10 million a year to support small family organic farms, to which MNB user Andrew Casey responded:

This seems like a smart move, particularly since Wal-Mart has announced a big move into organics. Mackey is establishing a point of difference by ensuring that when the supply gets tight and the conversation inevitably turns to the quality of "factory farmed" organics he will have locked up a supply from traditional, smaller organic farms.

We continue to see some debate about a proposed increase in the minimum wage, as one MNB user wrote:

If there is one industry out there that feels the impact of a minimum wage change; it is the retail industry; especially supermarket retail. I always believed that minimum wage was for entry level workers and those on summer vacation from school. The minimum wage was never meant as a means to support a family. Today however; it is a political football for politicians and a mechanism for unions to raise wages for their membership.

Think about the last time you opened a store or tried to staff any type of new operation that called for unskilled part time or full time labor. Did you worry about the minimum wage or did you worry about what the McDonalds down the street was offering for potential employees swimming in the same pool you are fishing from?

It’s called supply and demand and in an economy where employment is at 95%; labor is scarce. But if you could hire someone at the minimum wage, why wouldn’t you? It’s just my view, but the government should not worry about the minimum wage; they should worry about setting the stage for businesses to prosper so that they can grow, hire new employees, and strengthen our economy.

For all those individuals that wring their hands with concern over a “living” minimum wage, I ask you this: In a country where people can immigrate with nothing but the clothes on their back, build thriving businesses, and prosper by taking advantage of the American Dream, why can’t people born here do the same? It’s called a work ethic, and if you have one you don’t have to worry about supporting your family on the minimum wage.

And another MNB user wrote:

Who in their right mind is still accepting jobs at minimum wage?

The Bureau of Labor Statistics (BLS) reported that nonfarm employment increased by 75,000 in May, 2006. At 4.6 percent, the May unemployment rate was 0.1 percent lower from April. Today 5% unemployment is considered full employment. The rest are considered unemployable or unwilling to work (think of the disabled or the stay-at-home moms). Eight years ago that figure was 6% but through technology the previously unemployable are now employable. Point of sale systems now have pictures on them and count out the exact change for the tellers. Even the most uneducated in our ranks can find work.

In our current economic climate, it has become a workers market. New college grads are expected to see the hottest job market since the dot-com crash. Employers are looking at how to increase incentives to attract the best talent.

People who take low wage and minimum wage jobs do so because they think that’s the best they can do.

We do have problem in this country but it has nothing to do with wages and everything to do with our spend-crazy lack of saving. There is a collective denial going around that tomorrow will be greener. When the minimum wage was created the average household spent 90% of their earnings on food and shelter. Today that number is closer to 50%, yet we assume that we have a poverty problem. We do not. We do have a savings and spending problem. We all know people who look like they have it all together yet are deep in debt. In that mindset, it won’t matter how much they make.

If you or anyone you know has dug themselves in a hole, the best advice you can give them is to stop the digging! Cancel the cell phone, cut up the credit cards, cancel the cable TV, learn to cook at home, stop smoking, stop drinking.

I had an old boss share with me one time that he loved to see his employees buy a new car or a boat or a new house. The more they buy the harder they’ll work for me to pay for their stuff.

Finally, we had a story yesterday about values-driven business decisions being made by Choice Organic Teas, which recently decided to invest in a machine that ties string to tea bags rather than stapling it…because owner Blake Rankin didn’t want all those staples ending up in landfills. While the new machines actually is faster, that wasn’t the key to the decision – Rankin says he is guided more by a sense of moral obligation to the environment, farmers and consumers than by a desire to expand his business.

One MNB user expressed a certain skepticism about Rankin’s motivations:

Choice Organic Teas' owner, IMHO, isn't concerned as much for the landfills as he is for his own business being able to process the manufacturing of their product faster and, perhaps, much more efficiently and less expensively.

Bottom line, no matter what the business, is the P & L.

However, it does make for a nice and warm feeling to those "do-gooders" who can't see much beyond the end of their nose.

Not to try to type-cast you Kevin.

If you want to typecast us as a do-gooder who can’t see past the end of our nose, we’ll just have to live with that. (There are a few people out there who might disagree with that assessment.)

Maybe it’s because we’re just back from vacation, but we can’t be this cynical about Rankin’s decisions. We think he’s doing well by doing good, and that there’s nothing wrong with that. Nor is there a hidden agenda – he’s just looking our for our increasingly fragile planet.

By the way, we used the phrase ‘”fragile planet” in our commentary yesterday, and MNB user Dustin Stinett had a response:

I beg to differ with you about the stamina of this old planet we occupy. Only humans are arrogant enough to believe that they can permanently damage or even destroy it. Oh, it’s possible that we can make it temporarily uninhabitable for human beings, but trust me: This remarkably powerful world will renew itself. It has done so many times in the past and will continue to do so for millennia to come. Frankly, it’s far more likely that, well before we can cause our own demise, viruses—one of the smallest life forms on the planet—will be what ends humankind’s reign on Earth. So don’t sweat the big things! Have a glass of wine (or tea using bags with staples) and enjoy your short time here confident in the fact that the Planet Earth will continue to thrive without us!

Maybe it is egocentric to think so, but somehow we believe that it sort of misses the point to reassure ourselves that even if we manage to kill off every last human on earth, the planet itself will survive.

Cold comfort.

KC's View: