Nice retirement for a sweet, humble, smart Wal Mart couple

[Ravi]

I wonder if the couple shopped at Walmart.

 

[initforme]

I wonder if they could afford to eat while they were working?

 

[Mac1958]

Ravi doesn't like this example, prolly. Regular people being smart, putting money away, taking care of themselves 'n stuff.

Let's fire up my financial software.

If, between two people and 401K matching funds, you put away $1200 a month for 17 years at an 8% compounded growth rate, you end up with $525,885.03.

Nothing magical about that.

.

How could they put away $1200 a month for 17 years if they were only making $900 gross, for each a month and at the time you could only put in 10% of your income in to 401k's with a Walmart match of only 50% of the 10%?


I think this couple must have rolled a, or several, previous 401ks in to their Walmart 401k from the previous decade(s) they worked or IRA's in to their 401k at Walmart or something like that...and you were just unaware of this....because there is NO WAY POSSIBLE that 2 Walmart Sales clerks could save that kind of money, even with good investments, in their 401k's on Walmart Sales clerk salaries, in just 17 years.

How do you figure they were just making $900 gross? Where did I say that?

How do you know they were not investing (at least partially) in Wal Mart stock, which went from about $19 to about $84 during that time frame?

I think you're just looking to discredit the story. Choose not to believe it if you wish. Choose to believe that all Wal Mart employees are victims if you wish.

.

Well, minimum wage was about $6 an hour 17 years ago, or maybe it was around $5 an hour 17 years ago....? I used $6.00 for my estimate. Walmart hires sales clerks at minimum wage and works their full time employees 35 to 38 hours a week, I used 36 hours.... That brings their gross salary of $928 a month for each of them, which federal, state, income taxes and social security and medicare taxes are then taken out, plus whatever they paid as their share for health care and dental.....

It could be as you said that the little they did have to invest, they invested it in Walmart Stock, I had not thought of that....

That's not what I know of people who worked there. First you are assuming they started off at minimum wage.

Minimum wage was $5.15 when they started.

Today minimum wage is $7.25, and a cashier will earn upwards of $12, according to self-reported wages on Glassdoor.com.

Minimum wage is usually reserved for bran new employees, and part-time employees.

The idea that full-time employees do not work a full 40-hours, is a relatively new occurrence with health care mandates by the government, that require companies to buy expensive health care plans for workers who work a certain number of hours.

It is unlikely that back in the 90s, Walmart was cutting people's hours, because there would be no benefit to doing so, like there is today.

Doing department management work, is a natural step up from a cashier position, one they likely would have gotten after 17 years working there. And he did say they did some low level management work. You can earn 20/hr doing department management work today.

So I highly doubt your $6 an hour for 36 hours, is even remotely close. At 9/hr 40 hours, would be $19K a year, times two people, would be $37.5K a year.

Now Walmart has two retirement bonuses. Lot of people don't know this, but if you purchase Walmart stock, Walmart matches 15% on the first $1,800 of stock purchase.

So if you invest $1,800, you get $2,070 worth of Walmart stock.

Additionally, Walmart matches 6% into their 401K.

If they place 15% of their income into retirement. $9 X 40 $360 X 4 weeks $1440 X 15% $216 + 6% match = $302 times two people. That's $604 a month.

$604 a month in a good growth stock mutual fund getting 10% ROI, would be $323K in 17 years.

Add to that any purchases of Walmart stock, I don't think it's far fetched to see they could easily amass the amount given.

By the way, you are talking to someone who has earned $20K for the last 12 years, and has socked money away in a Roth IRA.

The reason I presumed they were menial employees and paid little is because Mac said they were....in his own words, he said they were shelf stockers and sales clerks etc, in a LOW stress job.

He didn't say they were working the very high stress 50-60 hour a week Assistant store managers, or department managers there...who work their buns off....

If they worked their way up the latter in higher level jobs then it easily could be achieved, as you even said, you have to work harder than anyone could imagine in retail....to make it to that top dog spot....but if you make, it does pay quite well, but those good jobs that pay good, are 1 out of every hundred workers, maybe even 1 out of every 500-1000 employees will make it to Store Manager level.....but it can be done, I agree. In Maine, Managers of a few Departments of the Store get paid $13.00 an hour...employees about 25 cents more than the minimum State wage....though this month I believe Walmart went to $9 for new hires.

Oh and employee stock purchase programs, it is NOT in your 401k and would NOT BE involved with your 401k...

I have participated in 3 different corporation employee stock purchase programs and it is not like you said Walmart did it, though the end result is the same.....

What you do, is elect to have the same amount of money taken out of each pay check to buy the corp's stock, and the Corporation gives us a 15% discount on our purchase....end result is you have 15% more stock than you would have had with that purchase... so this is probably what Walmart offers...

But like I said, that is separate from the 401k and Mac was discussing the 401k.

So, because Mac IMPLIED that these two people held menial type, non stressful jobs, is the only reason I question the amount they saved on the menial salaries I presumed they were paid for the positions mentioned that they held.
-----------------------------------------------------------------
EDIT!
Oh and full time employees are scheduled the 35 to 37 hours a week or so, because the employer does not want a situation that they may have to pay their hourly employee overtime pay, in case they end up clocking in or out 15 minutes earlier or later, or there a half an hour longer because of needing to finish up with a customer or finish up restocking a shelf or removing merchandise being returned to vendor etc...
----------------------------------------------------------------------
When they were hired at minimum wage or a quarter more when they were first hired, no one could even live on that unless they had a nest egg ahead of time from previous jobs that they did not transfer to their Walmart portfolio....which is possible I suppose? Or more than likely they transferred their portfolios to Walmart when they were first hired.

I believe strongly that it is the latter...because HOW can such frugal and saving money conscious people not have been frugal the first 27 years of their working life?

How could they have NOTHING saved in previous 401k's or IRAs before working for Walmart, with this kind of determine and strong and admirable mindset to save, save, save?

I personally am not trying to say Mac intentionally lied or anything like that... there are just too many pieces of the puzzle that are a mystery!!!! and quite frankly, UNKNOWN...

Nice to see someone here say that there are variables that can't be determined - usually everything is black & white here.

I've met with them three times: Our first, fact-finding meeting (they told me at that time they'd go with us), the second meeting to sign docs, and a quick third meeting when he just brought by and handed off an extra required document. It was only at the second meeting that I dug into their Wal Mart history, only because my staff and I were so impressed with what they had done; more out of curiosity than a need for the information (they're retired, I don't actually need the details).

They did all of the above, and I know she was flat broke when they started, she came from a lousy marriage to this one. The thing is, and I think I mentioned this elsewhere, it's not like this is the first time I've met couples like this, not by a longshot. This is just the way they are, they're both on the same page when it comes to money, and that's it. I keep using the word "humble" because that's the best word I can use to describe people like this. I'll bet I run into stories like this three or four times a year.

The Wal Mart angle stuck out to us because it's such an iconic name with such an iconic reputation. That's why we dug a little bit with them on the details.

And by the way, I run into many young couples who will be telling this story when they retire, because of the same reasons above. They're just dialed in and that's it. Being smart and frugal and humble with money gives them pleasure, not sure how else to describe it. Some people like fancy cars, others like fancy IRA statements.

In other words, this just isn't that unique a story. A few here don't like it and refuse to believe it; an interesting psychological study, but not my problem.

.

 

[Andylusion]

Ravi doesn't like this example, prolly. Regular people being smart, putting money away, taking care of themselves 'n stuff.

Let's fire up my financial software.

If, between two people and 401K matching funds, you put away $1200 a month for 17 years at an 8% compounded growth rate, you end up with $525,885.03.

Nothing magical about that.

.

How could they put away $1200 a month for 17 years if they were only making $900 gross, for each a month and at the time you could only put in 10% of your income in to 401k's with a Walmart match of only 50% of the 10%?


I think this couple must have rolled a, or several, previous 401ks in to their Walmart 401k from the previous decade(s) they worked or IRA's in to their 401k at Walmart or something like that...and you were just unaware of this....because there is NO WAY POSSIBLE that 2 Walmart Sales clerks could save that kind of money, even with good investments, in their 401k's on Walmart Sales clerk salaries, in just 17 years.

How do you figure they were just making $900 gross? Where did I say that?

How do you know they were not investing (at least partially) in Wal Mart stock, which went from about $19 to about $84 during that time frame?

I think you're just looking to discredit the story. Choose not to believe it if you wish. Choose to believe that all Wal Mart employees are victims if you wish.

.

Well, minimum wage was about $6 an hour 17 years ago, or maybe it was around $5 an hour 17 years ago....? I used $6.00 for my estimate. Walmart hires sales clerks at minimum wage and works their full time employees 35 to 38 hours a week, I used 36 hours.... That brings their gross salary of $928 a month for each of them, which federal, state, income taxes and social security and medicare taxes are then taken out, plus whatever they paid as their share for health care and dental.....

It could be as you said that the little they did have to invest, they invested it in Walmart Stock, I had not thought of that....

That's not what I know of people who worked there. First you are assuming they started off at minimum wage.

Minimum wage was $5.15 when they started.

Today minimum wage is $7.25, and a cashier will earn upwards of $12, according to self-reported wages on Glassdoor.com.

Minimum wage is usually reserved for bran new employees, and part-time employees.

The idea that full-time employees do not work a full 40-hours, is a relatively new occurrence with health care mandates by the government, that require companies to buy expensive health care plans for workers who work a certain number of hours.

It is unlikely that back in the 90s, Walmart was cutting people's hours, because there would be no benefit to doing so, like there is today.

Doing department management work, is a natural step up from a cashier position, one they likely would have gotten after 17 years working there. And he did say they did some low level management work. You can earn 20/hr doing department management work today.

So I highly doubt your $6 an hour for 36 hours, is even remotely close. At 9/hr 40 hours, would be $19K a year, times two people, would be $37.5K a year.

Now Walmart has two retirement bonuses. Lot of people don't know this, but if you purchase Walmart stock, Walmart matches 15% on the first $1,800 of stock purchase.

So if you invest $1,800, you get $2,070 worth of Walmart stock.

Additionally, Walmart matches 6% into their 401K.

If they place 15% of their income into retirement. $9 X 40 $360 X 4 weeks $1440 X 15% $216 + 6% match = $302 times two people. That's $604 a month.

$604 a month in a good growth stock mutual fund getting 10% ROI, would be $323K in 17 years.

Add to that any purchases of Walmart stock, I don't think it's far fetched to see they could easily amass the amount given.

By the way, you are talking to someone who has earned $20K for the last 12 years, and has socked money away in a Roth IRA.

The reason I presumed they were menial employees and paid little is because Mac said they were....in his own words, he said they were shelf stockers and sales clerks etc, in a LOW stress job.

He didn't say they were working the very high stress 50-60 hour a week Assistant store managers, or department managers there...who work their buns off....

If they worked their way up the latter in higher level jobs then it easily could be achieved, as you even said, you have to work harder than anyone could imagine in retail....to make it to that top dog spot....but if you make, it does pay quite well, but those good jobs that pay good, are 1 out of every hundred workers, maybe even 1 out of every 500-1000 employees will make it to Store Manager level.....but it can be done, I agree. In Maine, Managers of a few Departments of the Store get paid $13.00 an hour...employees about 25 cents more than the minimum State wage....though this month I believe Walmart went to $9 for new hires.

Oh and employee stock purchase programs, it is NOT in your 401k and would NOT BE involved with your 401k...

I have participated in 3 different corporation employee stock purchase programs and it is not like you said Walmart did it, though the end result is the same.....

What you do, is elect to have the same amount of money taken out of each pay check to buy the corp's stock, and the Corporation gives us a 15% discount on our purchase....end result is you have 15% more stock than you would have had with that purchase... so this is probably what Walmart offers...

But like I said, that is separate from the 401k and Mac was discussing the 401k.

So, because Mac IMPLIED that these two people held menial type, non stressful jobs, is the only reason I question the amount they saved on the menial salaries I presumed they were paid for the positions mentioned that they held.
-----------------------------------------------------------------
EDIT!
Oh and full time employees are scheduled the 35 to 37 hours a week or so, because the employer does not want a situation that they may have to pay their hourly employee overtime pay, in case they end up clocking in or out 15 minutes earlier or later, or there a half an hour longer because of needing to finish up with a customer or finish up restocking a shelf or removing merchandise being returned to vendor etc...
----------------------------------------------------------------------
When they were hired at minimum wage or a quarter more when they were first hired, no one could even live on that unless they had a nest egg ahead of time from previous jobs that they did not transfer to their Walmart portfolio....which is possible I suppose? Or more than likely they transferred their portfolios to Walmart when they were first hired.

I believe strongly that it is the latter...because HOW can such frugal and saving money conscious people not have been frugal the first 27 years of their working life?

How could they have NOTHING saved in previous 401k's or IRAs before working for Walmart, with this kind of determine and strong and admirable mindset to save, save, save?

I personally am not trying to say Mac intentionally lied or anything like that... there are just too many pieces of the puzzle that are a mystery!!!! and quite frankly, UNKNOWN...

I guess I never considered department managers to be a high stress position. Low level jobs at walmart, are not paid minimum wage. According to glassdoor.com of self reported wages, a Cashier can make $12/hr today, when the minimum wage is $7.25.

I think that is where you and I differ. If they were a greeter, putting in 30 hours, yeah, that might be a minimum wage job.

I don't think that's what they were doing. If it is, then yeah, saving that much money would be difficult.

so this couple both began working at walmart at 46 yrs old....and they had nothing at all saved and no retirement portfolio until they both began working at walmart at 46 years old????

I'm sorry but i don't care HOW FRUGAL they were, they could not live off of $6 an hour 17 years ago, even in the cheapest region and save and make the kind of money they made in their retirement fund in that short of a time....your restricted on company matches and restricted on how much you can invest in to your 401k etc etc etc.....it's gotten better over the 17 years granted but that has been fairly recent if memory serves.

My BET is that this couple worked their asses off at some sort of professional job that paid better and they saved as much as they could, then when they were approaching 50 they both probably said, screw it, screw the stress, we have saved enough...let's go get unstressful jobs and go and travel and camp and go hiking whenever they wanted.

that's what the hubby and I did....

When we were in our mid 40's we both decided that we would semi retire and quit our very high stress 50 to 60 hour a week high level jobs.... we had enough in retirement savings, we had enough to pay cash for a new home and we owned our cars with no payments....we sold the house, moved to Maine, paid cash for the new home and I stopped working altogether and Matthew took a menial, no nothing job that had health insurance coverage for the two of us....

so in a sense, we are both retired, even though Matt is working almost full time, it's a nothing type of job and pays little, but does pick up a good deal of the health care coverage for us and we get to do whatever we want, and he is doubling down on his 401k now....

It works for us.....no more vacations to Hawaii or the Carribean or Mexico or Puerto Rico etc etc etc 3 times a year anymore, we haven't bought new cars in a while etc...but it works for us....its what we want.

And I would bet, this couple did the same.....

I bet they rolled their retirement investment portfolio that they must have had from the first 29 years that they worked, over in to their Walmart 401k and this is why it is so large in 17 years.... otherwise, I honestly see it as impossible, even with walmart stock going up, even with the crashes where they could benefit from buying more, ETC ETC. Remember, it was said that they made all of this money in their 401k only while at walmart, and that is what I am saying is impossible, UNLESS they transferred money in to the account from previous 401 k's etc 17 years ago....

Sure, it could be they lived with a family member for free, it could be their cars were bought for them by family or someone or it could be they drove 20 year old cars, but even with that frugalness, it is still impossible to get a 401k that large in such a short time period.

Even if they maxed out their 401k caps in the beginning.... they only could put $1000 a year or so in it with their sales clerk salaries so low when they first started.

Bingo. I wonder how many would advise their kids to work just 17 years at Walmart and be set for life

It's all a matter of how much you are willing to sacrifice in the short term, to win in the long term. You can save up a ton of money, if you really want to.

I've lived on less than $20K a year for the last 12 years. I can imagine how someone earning $30K - $40K could not save. But people tend to consume all they earn... then yes, you'll be poor and working till the day you die.

 

[Andylusion]

They still owe on their mortgage, not much. But I never said they had paid it off. You made that up. Lied.

I don't think it's their boat. They're camping with friends. They do have that cool new little 4x4 thing, though.

You hate this, so you just refuse to believe it. Too funny.

.

I think they assume everyone at Walmart earns minimum wage. That's all I can gather from the conversation on this thread.

I don't know ANYONE making minimum wage at Walmart.

They refuse to believe that regular Americans can live happy, humble lives.

They want everyone else to be as miserable as they are.

.

Nope. We just think you are lying to further your agenda.

What is his agenda?

Holier than thou PC Queen.

That is ridiculous. I have to assume that you make those accusations of others, because you yourself in fact have an agenda, and would lie to support it.

The rest of us are not that way. The reason I tell people they can earn modest wages, and still save money, is because I have personally done this.

I'm not suggesting anyone can do something that I have personally not done myself.

 

[Ravi]

How could they put away $1200 a month for 17 years if they were only making $900 gross, for each a month and at the time you could only put in 10% of your income in to 401k's with a Walmart match of only 50% of the 10%?


I think this couple must have rolled a, or several, previous 401ks in to their Walmart 401k from the previous decade(s) they worked or IRA's in to their 401k at Walmart or something like that...and you were just unaware of this....because there is NO WAY POSSIBLE that 2 Walmart Sales clerks could save that kind of money, even with good investments, in their 401k's on Walmart Sales clerk salaries, in just 17 years.

How do you figure they were just making $900 gross? Where did I say that?

How do you know they were not investing (at least partially) in Wal Mart stock, which went from about $19 to about $84 during that time frame?

I think you're just looking to discredit the story. Choose not to believe it if you wish. Choose to believe that all Wal Mart employees are victims if you wish.

.

Well, minimum wage was about $6 an hour 17 years ago, or maybe it was around $5 an hour 17 years ago....? I used $6.00 for my estimate. Walmart hires sales clerks at minimum wage and works their full time employees 35 to 38 hours a week, I used 36 hours.... That brings their gross salary of $928 a month for each of them, which federal, state, income taxes and social security and medicare taxes are then taken out, plus whatever they paid as their share for health care and dental.....

It could be as you said that the little they did have to invest, they invested it in Walmart Stock, I had not thought of that....

That's not what I know of people who worked there. First you are assuming they started off at minimum wage.

Minimum wage was $5.15 when they started.

Today minimum wage is $7.25, and a cashier will earn upwards of $12, according to self-reported wages on Glassdoor.com.

Minimum wage is usually reserved for bran new employees, and part-time employees.

The idea that full-time employees do not work a full 40-hours, is a relatively new occurrence with health care mandates by the government, that require companies to buy expensive health care plans for workers who work a certain number of hours.

It is unlikely that back in the 90s, Walmart was cutting people's hours, because there would be no benefit to doing so, like there is today.

Doing department management work, is a natural step up from a cashier position, one they likely would have gotten after 17 years working there. And he did say they did some low level management work. You can earn 20/hr doing department management work today.

So I highly doubt your $6 an hour for 36 hours, is even remotely close. At 9/hr 40 hours, would be $19K a year, times two people, would be $37.5K a year.

Now Walmart has two retirement bonuses. Lot of people don't know this, but if you purchase Walmart stock, Walmart matches 15% on the first $1,800 of stock purchase.

So if you invest $1,800, you get $2,070 worth of Walmart stock.

Additionally, Walmart matches 6% into their 401K.

If they place 15% of their income into retirement. $9 X 40 $360 X 4 weeks $1440 X 15% $216 + 6% match = $302 times two people. That's $604 a month.

$604 a month in a good growth stock mutual fund getting 10% ROI, would be $323K in 17 years.

Add to that any purchases of Walmart stock, I don't think it's far fetched to see they could easily amass the amount given.

By the way, you are talking to someone who has earned $20K for the last 12 years, and has socked money away in a Roth IRA.

The reason I presumed they were menial employees and paid little is because Mac said they were....in his own words, he said they were shelf stockers and sales clerks etc, in a LOW stress job.

He didn't say they were working the very high stress 50-60 hour a week Assistant store managers, or department managers there...who work their buns off....

If they worked their way up the latter in higher level jobs then it easily could be achieved, as you even said, you have to work harder than anyone could imagine in retail....to make it to that top dog spot....but if you make, it does pay quite well, but those good jobs that pay good, are 1 out of every hundred workers, maybe even 1 out of every 500-1000 employees will make it to Store Manager level.....but it can be done, I agree. In Maine, Managers of a few Departments of the Store get paid $13.00 an hour...employees about 25 cents more than the minimum State wage....though this month I believe Walmart went to $9 for new hires.

Oh and employee stock purchase programs, it is NOT in your 401k and would NOT BE involved with your 401k...

I have participated in 3 different corporation employee stock purchase programs and it is not like you said Walmart did it, though the end result is the same.....

What you do, is elect to have the same amount of money taken out of each pay check to buy the corp's stock, and the Corporation gives us a 15% discount on our purchase....end result is you have 15% more stock than you would have had with that purchase... so this is probably what Walmart offers...

But like I said, that is separate from the 401k and Mac was discussing the 401k.

So, because Mac IMPLIED that these two people held menial type, non stressful jobs, is the only reason I question the amount they saved on the menial salaries I presumed they were paid for the positions mentioned that they held.
-----------------------------------------------------------------
EDIT!
Oh and full time employees are scheduled the 35 to 37 hours a week or so, because the employer does not want a situation that they may have to pay their hourly employee overtime pay, in case they end up clocking in or out 15 minutes earlier or later, or there a half an hour longer because of needing to finish up with a customer or finish up restocking a shelf or removing merchandise being returned to vendor etc...
----------------------------------------------------------------------
When they were hired at minimum wage or a quarter more when they were first hired, no one could even live on that unless they had a nest egg ahead of time from previous jobs that they did not transfer to their Walmart portfolio....which is possible I suppose? Or more than likely they transferred their portfolios to Walmart when they were first hired.

I believe strongly that it is the latter...because HOW can such frugal and saving money conscious people not have been frugal the first 27 years of their working life?

How could they have NOTHING saved in previous 401k's or IRAs before working for Walmart, with this kind of determine and strong and admirable mindset to save, save, save?

I personally am not trying to say Mac intentionally lied or anything like that... there are just too many pieces of the puzzle that are a mystery!!!! and quite frankly, UNKNOWN...

Nice to see someone here say that there are variables that can't be determined - usually everything is black & white here.

I've met with them three times: Our first, fact-finding meeting (they told me at that time they'd go with us), the second meeting to sign docs, and a quick third meeting when he just brought by and handed off an extra required document. It was only at the second meeting that I dug into their Wal Mart history, only because my staff and I were so impressed with what they had done; more out of curiosity than a need for the information (they're retired, I don't actually need the details).

They did all of the above, and I know she was flat broke when they started, she came from a lousy marriage to this one. The thing is, and I think I mentioned this elsewhere, it's not like this is the first time I've met couples like this, not by a longshot. This is just the way they are, they're both on the same page when it comes to money, and that's it. I keep using the word "humble" because that's the best word I can use to describe people like this. I'll bet I run into stories like this three or four times a year.

The Wal Mart angle stuck out to us because it's such an iconic name with such an iconic reputation. That's why we dug a little bit with them on the details.

And by the way, I run into many young couples who will be telling this story when they retire, because of the same reasons above. They're just dialed in and that's it. Being smart and frugal and humble with money gives them pleasure, not sure how else to describe it. Some people like fancy cars, others like fancy IRA statements.

In other words, this just isn't that unique a story. A few here don't like it and refuse to believe it; an interesting psychological study, but not my problem.

.

And yet in your op you insinuated that this couple did this working 17 years of menial labor at Walmart (which you bolded). You are more transparent than you think.

 

[Mac1958]

How do you figure they were just making $900 gross? Where did I say that?

How do you know they were not investing (at least partially) in Wal Mart stock, which went from about $19 to about $84 during that time frame?

I think you're just looking to discredit the story. Choose not to believe it if you wish. Choose to believe that all Wal Mart employees are victims if you wish.

.

Well, minimum wage was about $6 an hour 17 years ago, or maybe it was around $5 an hour 17 years ago....? I used $6.00 for my estimate. Walmart hires sales clerks at minimum wage and works their full time employees 35 to 38 hours a week, I used 36 hours.... That brings their gross salary of $928 a month for each of them, which federal, state, income taxes and social security and medicare taxes are then taken out, plus whatever they paid as their share for health care and dental.....

It could be as you said that the little they did have to invest, they invested it in Walmart Stock, I had not thought of that....

That's not what I know of people who worked there. First you are assuming they started off at minimum wage.

Minimum wage was $5.15 when they started.

Today minimum wage is $7.25, and a cashier will earn upwards of $12, according to self-reported wages on Glassdoor.com.

Minimum wage is usually reserved for bran new employees, and part-time employees.

The idea that full-time employees do not work a full 40-hours, is a relatively new occurrence with health care mandates by the government, that require companies to buy expensive health care plans for workers who work a certain number of hours.

It is unlikely that back in the 90s, Walmart was cutting people's hours, because there would be no benefit to doing so, like there is today.

Doing department management work, is a natural step up from a cashier position, one they likely would have gotten after 17 years working there. And he did say they did some low level management work. You can earn 20/hr doing department management work today.

So I highly doubt your $6 an hour for 36 hours, is even remotely close. At 9/hr 40 hours, would be $19K a year, times two people, would be $37.5K a year.

Now Walmart has two retirement bonuses. Lot of people don't know this, but if you purchase Walmart stock, Walmart matches 15% on the first $1,800 of stock purchase.

So if you invest $1,800, you get $2,070 worth of Walmart stock.

Additionally, Walmart matches 6% into their 401K.

If they place 15% of their income into retirement. $9 X 40 $360 X 4 weeks $1440 X 15% $216 + 6% match = $302 times two people. That's $604 a month.

$604 a month in a good growth stock mutual fund getting 10% ROI, would be $323K in 17 years.

Add to that any purchases of Walmart stock, I don't think it's far fetched to see they could easily amass the amount given.

By the way, you are talking to someone who has earned $20K for the last 12 years, and has socked money away in a Roth IRA.

The reason I presumed they were menial employees and paid little is because Mac said they were....in his own words, he said they were shelf stockers and sales clerks etc, in a LOW stress job.

He didn't say they were working the very high stress 50-60 hour a week Assistant store managers, or department managers there...who work their buns off....

If they worked their way up the latter in higher level jobs then it easily could be achieved, as you even said, you have to work harder than anyone could imagine in retail....to make it to that top dog spot....but if you make, it does pay quite well, but those good jobs that pay good, are 1 out of every hundred workers, maybe even 1 out of every 500-1000 employees will make it to Store Manager level.....but it can be done, I agree. In Maine, Managers of a few Departments of the Store get paid $13.00 an hour...employees about 25 cents more than the minimum State wage....though this month I believe Walmart went to $9 for new hires.

Oh and employee stock purchase programs, it is NOT in your 401k and would NOT BE involved with your 401k...

I have participated in 3 different corporation employee stock purchase programs and it is not like you said Walmart did it, though the end result is the same.....

What you do, is elect to have the same amount of money taken out of each pay check to buy the corp's stock, and the Corporation gives us a 15% discount on our purchase....end result is you have 15% more stock than you would have had with that purchase... so this is probably what Walmart offers...

But like I said, that is separate from the 401k and Mac was discussing the 401k.

So, because Mac IMPLIED that these two people held menial type, non stressful jobs, is the only reason I question the amount they saved on the menial salaries I presumed they were paid for the positions mentioned that they held.
-----------------------------------------------------------------
EDIT!
Oh and full time employees are scheduled the 35 to 37 hours a week or so, because the employer does not want a situation that they may have to pay their hourly employee overtime pay, in case they end up clocking in or out 15 minutes earlier or later, or there a half an hour longer because of needing to finish up with a customer or finish up restocking a shelf or removing merchandise being returned to vendor etc...
----------------------------------------------------------------------
When they were hired at minimum wage or a quarter more when they were first hired, no one could even live on that unless they had a nest egg ahead of time from previous jobs that they did not transfer to their Walmart portfolio....which is possible I suppose? Or more than likely they transferred their portfolios to Walmart when they were first hired.

I believe strongly that it is the latter...because HOW can such frugal and saving money conscious people not have been frugal the first 27 years of their working life?

How could they have NOTHING saved in previous 401k's or IRAs before working for Walmart, with this kind of determine and strong and admirable mindset to save, save, save?

I personally am not trying to say Mac intentionally lied or anything like that... there are just too many pieces of the puzzle that are a mystery!!!! and quite frankly, UNKNOWN...

Nice to see someone here say that there are variables that can't be determined - usually everything is black & white here.

I've met with them three times: Our first, fact-finding meeting (they told me at that time they'd go with us), the second meeting to sign docs, and a quick third meeting when he just brought by and handed off an extra required document. It was only at the second meeting that I dug into their Wal Mart history, only because my staff and I were so impressed with what they had done; more out of curiosity than a need for the information (they're retired, I don't actually need the details).

They did all of the above, and I know she was flat broke when they started, she came from a lousy marriage to this one. The thing is, and I think I mentioned this elsewhere, it's not like this is the first time I've met couples like this, not by a longshot. This is just the way they are, they're both on the same page when it comes to money, and that's it. I keep using the word "humble" because that's the best word I can use to describe people like this. I'll bet I run into stories like this three or four times a year.

The Wal Mart angle stuck out to us because it's such an iconic name with such an iconic reputation. That's why we dug a little bit with them on the details.

And by the way, I run into many young couples who will be telling this story when they retire, because of the same reasons above. They're just dialed in and that's it. Being smart and frugal and humble with money gives them pleasure, not sure how else to describe it. Some people like fancy cars, others like fancy IRA statements.

In other words, this just isn't that unique a story. A few here don't like it and refuse to believe it; an interesting psychological study, but not my problem.

.

And yet in your op you insinuated that this couple did this working 17 years of menial labor at Walmart (which you bolded). You are more transparent than you think.

So you have to lie again. Always a good sign.

Look at what I wrote. I said they both worked in stores, not in corporate. They both made it to managerial positions, not that big a deal, working there that long. Did I use the word "menial", as you did? Nope.

Do you plan on continuing with the lying?

You're desperate to believe this can't happen. Great, don't believe it. But that doesn't make me a liar like you.

.

 

[Ravi]

You should let them read this thread.

 

[Andylusion]

You should let them read this thread.

From the OP....

"Not in corporate, but in regular ol' stores. Stocking shelves, receiving, some management, you name it."

Some management.... stocking shelves, receiving, you name it.

Implication: They were doing different positions over a period of years.

Implication: They got raises from moving up the ladder.

They don't need to read the thread... they told him all this themselves. It would be boring reading everything they themselves said.

 

[Mac1958]

You should let them read this thread.

From the OP....

"Not in corporate, but in regular ol' stores. Stocking shelves, receiving, some management, you name it."

Some management.... stocking shelves, receiving, you name it.

Implication: They were doing different positions over a period of years.

Implication: They got raises from moving up the ladder.

They don't need to read the thread... they told him all this themselves. It would be boring reading everything they themselves said.

Pretty sad that they refuse to believe a nice, positive example of people being smart with money, huh?

Had the thread been about a company fucking the couple over, these folks would be thrilled.

.

 

[Flopper]

Magical thinking, prolly.

Ravi doesn't like this example, prolly. Regular people being smart, putting money away, taking care of themselves 'n stuff.

Let's fire up my financial software.

If, between two people and 401K matching funds, you put away $1200 a month for 17 years at an 8% compounded growth rate, you end up with $525,885.03.

Nothing magical about that.

.

How could they put away $1200 a month for 17 years if they were only making $900 gross, for each a month and at the time you could only put in 10% of your income in to 401k's with a Walmart match of only 50% of the 10%?


I think this couple must have rolled a, or several, previous 401ks in to their Walmart 401k from the previous decade(s) they worked or IRA's in to their 401k at Walmart or something like that...and you were just unaware of this....because there is NO WAY POSSIBLE that 2 Walmart Sales clerks could save that kind of money, even with good investments, in their 401k's on Walmart Sales clerk salaries, in just 17 years.

How do you figure they were just making $900 gross? Where did I say that?

How do you know they were not investing (at least partially) in Wal Mart stock, which went from about $19 to about $84 during that time frame?

I think you're just looking to discredit the story. Choose not to believe it if you wish. Choose to believe that all Wal Mart employees are victims if you wish.

.

Well, minimum wage was about $6 an hour 17 years ago, or maybe it was around $5 an hour 17 years ago....? I used $6.00 for my estimate. Walmart hires sales clerks at minimum wage and works their full time employees 35 to 38 hours a week, I used 36 hours.... That brings their gross salary of $928 a month for each of them, which federal, state, income taxes and social security and medicare taxes are then taken out, plus whatever they paid as their share for health care and dental.....

It could be as you said that the little they did have to invest, they invested it in Walmart Stock, I had not thought of that....

That's not what I know of people who worked there. First you are assuming they started off at minimum wage.

Minimum wage was $5.15 when they started.

Today minimum wage is $7.25, and a cashier will earn upwards of $12, according to self-reported wages on Glassdoor.com.

Minimum wage is usually reserved for bran new employees, and part-time employees.

The idea that full-time employees do not work a full 40-hours, is a relatively new occurrence with health care mandates by the government, that require companies to buy expensive health care plans for workers who work a certain number of hours.

It is unlikely that back in the 90s, Walmart was cutting people's hours, because there would be no benefit to doing so, like there is today.

Doing department management work, is a natural step up from a cashier position, one they likely would have gotten after 17 years working there. And he did say they did some low level management work. You can earn 20/hr doing department management work today.

So I highly doubt your $6 an hour for 36 hours, is even remotely close. At 9/hr 40 hours, would be $19K a year, times two people, would be $37.5K a year.

Now Walmart has two retirement bonuses. Lot of people don't know this, but if you purchase Walmart stock, Walmart matches 15% on the first $1,800 of stock purchase.

So if you invest $1,800, you get $2,070 worth of Walmart stock.

Additionally, Walmart matches 6% into their 401K.

If they place 15% of their income into retirement. $9 X 40 $360 X 4 weeks $1440 X 15% $216 + 6% match = $302 times two people. That's $604 a month.

$604 a month in a good growth stock mutual fund getting 10% ROI, would be $323K in 17 years.

Add to that any purchases of Walmart stock, I don't think it's far fetched to see they could easily amass the amount given.

By the way, you are talking to someone who has earned $20K for the last 12 years, and has socked money away in a Roth IRA.

Depending on where and how you live, it's certainly possible for a person to live on $20K a year and have a 401K. However, when you add in a family, $20K a year is well below the poverty level. Even at $40K, it's really hard in most places in the country.

I'm sure a lot of people at Wall Mart make $12/hr. That's $444/wk after payroll taxes. With the average 2 bedroom apartment in the US costing just under $900/mo. That leaves our $12/hr cashier about $225/wk to pay for groceries, household expenses, utilities, healthcare, dental care, clothing, school expenses, child care, transportation, and misc. expenses. Try managing that budget without some government assistance.

This is why we're spending over a trillion dollars a year on welfare, medicaid, food stamps and other social programs. If America wants to reduce it's cost of social programs, it's going to have to pay low income workers more.

 

[EdwardBaiamonte]

If America wants to reduce it's cost of social programs, it's going to have to pay low income workers more.

of course thats idiotic and liberal. If America reduced what it spends on social programs business would have to pay higher wages!! Liberals are 100% stupid. They see how capitalism quadrupled income in China and want America to use socialism even after it slowly starved 60 million death


.

 

[Ravi]

Ravi doesn't like this example, prolly. Regular people being smart, putting money away, taking care of themselves 'n stuff.

Let's fire up my financial software.

If, between two people and 401K matching funds, you put away $1200 a month for 17 years at an 8% compounded growth rate, you end up with $525,885.03.

Nothing magical about that.

.

How could they put away $1200 a month for 17 years if they were only making $900 gross, for each a month and at the time you could only put in 10% of your income in to 401k's with a Walmart match of only 50% of the 10%?


I think this couple must have rolled a, or several, previous 401ks in to their Walmart 401k from the previous decade(s) they worked or IRA's in to their 401k at Walmart or something like that...and you were just unaware of this....because there is NO WAY POSSIBLE that 2 Walmart Sales clerks could save that kind of money, even with good investments, in their 401k's on Walmart Sales clerk salaries, in just 17 years.

How do you figure they were just making $900 gross? Where did I say that?

How do you know they were not investing (at least partially) in Wal Mart stock, which went from about $19 to about $84 during that time frame?

I think you're just looking to discredit the story. Choose not to believe it if you wish. Choose to believe that all Wal Mart employees are victims if you wish.

.

Well, minimum wage was about $6 an hour 17 years ago, or maybe it was around $5 an hour 17 years ago....? I used $6.00 for my estimate. Walmart hires sales clerks at minimum wage and works their full time employees 35 to 38 hours a week, I used 36 hours.... That brings their gross salary of $928 a month for each of them, which federal, state, income taxes and social security and medicare taxes are then taken out, plus whatever they paid as their share for health care and dental.....

It could be as you said that the little they did have to invest, they invested it in Walmart Stock, I had not thought of that....

That's not what I know of people who worked there. First you are assuming they started off at minimum wage.

Minimum wage was $5.15 when they started.

Today minimum wage is $7.25, and a cashier will earn upwards of $12, according to self-reported wages on Glassdoor.com.

Minimum wage is usually reserved for bran new employees, and part-time employees.

The idea that full-time employees do not work a full 40-hours, is a relatively new occurrence with health care mandates by the government, that require companies to buy expensive health care plans for workers who work a certain number of hours.

It is unlikely that back in the 90s, Walmart was cutting people's hours, because there would be no benefit to doing so, like there is today.

Doing department management work, is a natural step up from a cashier position, one they likely would have gotten after 17 years working there. And he did say they did some low level management work. You can earn 20/hr doing department management work today.

So I highly doubt your $6 an hour for 36 hours, is even remotely close. At 9/hr 40 hours, would be $19K a year, times two people, would be $37.5K a year.

Now Walmart has two retirement bonuses. Lot of people don't know this, but if you purchase Walmart stock, Walmart matches 15% on the first $1,800 of stock purchase.

So if you invest $1,800, you get $2,070 worth of Walmart stock.

Additionally, Walmart matches 6% into their 401K.

If they place 15% of their income into retirement. $9 X 40 $360 X 4 weeks $1440 X 15% $216 + 6% match = $302 times two people. That's $604 a month.

$604 a month in a good growth stock mutual fund getting 10% ROI, would be $323K in 17 years.

Add to that any purchases of Walmart stock, I don't think it's far fetched to see they could easily amass the amount given.

By the way, you are talking to someone who has earned $20K for the last 12 years, and has socked money away in a Roth IRA.

Depending on where and how you live, it's certainly possible for a person to live on $20K a year and have a 401K. However, when you add in a family, $20K a year is well below the poverty level. Even at $40K, it's really hard in most places in the country.

I'm sure a lot of people at Wall Mart make $12/hr. That's $444/wk after payroll taxes. With the average 2 bedroom apartment in the US costing just under $900/mo. That leaves our $12/hr cashier about $225/wk to pay for groceries, household expenses, utilities, healthcare, dental care, clothing, school expenses, child care, transportation, and misc. expenses. Try managing that budget without some government assistance.

This is why we're spending over a trillion dollars a year on welfare, medicaid, food stamps and other social programs. If America wants to reduce it's cost of social programs, it's going to have to pay low income workers more.

So basically the couple wasn't so much frugal as subsidized.

 

[Flopper]

If America wants to reduce it's cost of social programs, it's going to have to pay low income workers more.

of course thats idiotic and liberal. If America reduced what it spends on social programs business would have to pay higher wages!! Liberals are 100% stupid. They see how capitalism quadrupled income in China and want America to use socialism even after it slowly starved 60 million death


.

No, that's not what I said and your interpretation is completely illogical. If America reduced spending on social programs that would certainly not force businesses to pay higher wages. However, if employers pay higher wages to low income earners, we won't need the level social programs we have today.

The problem is how do we get higher wages for about 25% of the population. Thanks to globalization and free trade, American workers are in competition with workers in nations whose wages are a fraction of US wages.

 

[Spare_change]

If America wants to reduce it's cost of social programs, it's going to have to pay low income workers more.

of course thats idiotic and liberal. If America reduced what it spends on social programs business would have to pay higher wages!! Liberals are 100% stupid. They see how capitalism quadrupled income in China and want America to use socialism even after it slowly starved 60 million death


.

No, that's not what I said and your interpretation is completely illogical. If America reduced spending on social programs that would certainly not force businesses to pay higher wages. However, if employers pay higher wages to low income earners, we won't need the level social programs we have today.

The problem is how do we get higher wages for about 25% of the population. Thanks to globalization and free trade, American workers are in competition with workers in nations whose wages are a fraction of US wages.

As long as you subsidize the low wages I pay, I have no incentive to raise the wage level. Only when the worker demands more, and I can't find others who will do it for less, will the average wage increase.

 

[Flopper]

If America wants to reduce it's cost of social programs, it's going to have to pay low income workers more.

of course thats idiotic and liberal. If America reduced what it spends on social programs business would have to pay higher wages!! Liberals are 100% stupid. They see how capitalism quadrupled income in China and want America to use socialism even after it slowly starved 60 million death


.

No, that's not what I said and your interpretation is completely illogical. If America reduced spending on social programs that would certainly not force businesses to pay higher wages. However, if employers pay higher wages to low income earners, we won't need the level social programs we have today.

The problem is how do we get higher wages for about 25% of the population. Thanks to globalization and free trade, American workers are in competition with workers in nations whose wages are a fraction of US wages.

As long as you subsidize the low wages I pay, I have no incentive to raise the wage level. Only when the worker demands more, and I can't find others who will do it for less, will the average wage increase.

Don't you realize we are all subsidizing low wages now, Medicaid, Welfare, Food Stamps, and other social programs.

I agree that increasing the demand for workers is the only real viable solution. Probably the best way to do this is with large infrastructure spending that will reduce the slack in the labor pool. Unlike much government spending, infrastructure spending makes America more productive so there is real economic payback..

However, infrastructure spending is only a temporary solution. The basic problem remains. The entry of China, India and the former Soviet Union into the global economy has double the size of the global workforce. Most of these workers have wages in the range of $2 to $5/hr which makes it very difficult for low income earners in the US.

Over the long term, two things must happen to narrow the US wage gap. First, wages must increase in other nations such as China and India. This is happening but it will take many years for the wages in these countries to reach the level of the US worker. Secondly, US low end workers must become more productive to warrant higher pay. That means giving workers the tools they need to become more productive.

 

[Spare_change]

If America wants to reduce it's cost of social programs, it's going to have to pay low income workers more.

of course thats idiotic and liberal. If America reduced what it spends on social programs business would have to pay higher wages!! Liberals are 100% stupid. They see how capitalism quadrupled income in China and want America to use socialism even after it slowly starved 60 million death


.

No, that's not what I said and your interpretation is completely illogical. If America reduced spending on social programs that would certainly not force businesses to pay higher wages. However, if employers pay higher wages to low income earners, we won't need the level social programs we have today.

The problem is how do we get higher wages for about 25% of the population. Thanks to globalization and free trade, American workers are in competition with workers in nations whose wages are a fraction of US wages.

As long as you subsidize the low wages I pay, I have no incentive to raise the wage level. Only when the worker demands more, and I can't find others who will do it for less, will the average wage increase.

Don't you realize we are all subsidizing low wages now, Medicaid, Welfare, Food Stamps, and other social programs.

I agree that increasing the demand for workers is the only real viable solution. Probably the best way to do this is with large infrastructure spending that will reduce the slack in the labor pool. Unlike much government spending, infrastructure spending makes America more productive so there is real economic payback..

However, infrastructure spending is only a temporary solution. The basic problem remains. The entry of China, India and the former Soviet Union into the global economy has double the size of the global workforce. Most of these workers have wages in the range of $2 to $5/hr which makes it very difficult for low income earners in the US.

Over the long term, two things must happen to narrow the US wage gap. First, wages must increase in other nations such as China and India. This is happening but it will take many years for the wages in these countries to reach the level of the US worker. Secondly, US low end workers must become more productive to warrant higher pay. That means giving workers the tools they need to become more productive.

As a business owner, I thank each and every one of you for subsidizing my labor costs. But, you get yours in return ... lower prices.

If we increase the minimum wage, or more appropriately, increase the wages of the bottom 10%, the resulting ripple will be felt in middle class homes. If I have to pay more for labor, I will pass that extra cost on to the consumer by raising product prices.

If I raise product prices, the middle class will be faced with two choices: 1) quit buying the product, or 2) pay a larger percentage of your income for the product. Since it is unrealistic to think that people are going to quit eating, or living, eliminating a product from the market is unreasonable. You can,however, expect that people will pay the larger price.

The middle class then will, of course, demand an increase in wages in order to offset the increase in cost of living. Increasing income of the middle class will then result in even higher prices - which means the lower class will need another increase in wages in order to offset the increase in prices.

And, so the cycle goes on ....

The answer is not to increase their wages, but give them opportunity, and the incentive, to increase their position in the job market thru education.

Infrastructure maintenance and upgrade is ballyhooed as being the solution - but, in reality, it would exacerbate the problem, not fix it. Nobody questions that the infrastructure needs to be upgraded. It is almost criminal the way it has been ignored. But, to claim it as a panacea for the poor is simplistic and shortsighted.

Infrastructure upgrade is done with tax dollars - tax dollars that would have to be taken from other programs. Which government programs do you propose we eliminate? The alternatives to that --- borrow the money or increase taxes.

'Increase taxes' seems to be the easiest and most politically acceptable - after all, the majority of people would not be affected (or minimally), and the load would be carried by the top 30% of income earners. However, we need to keep in mind that, of every dollar we remove from the economy, 38% of it goes to operating/maintaining the government oversight. So, only 62% ends up at the production level. In addition, there is the unequal penalty of tax increases - why should one person who drives over a bridge pay $500 a year for the bridge, while the person in the car behind them pays nothing? The concept violates the very essence of our country.

We also need to be aware that every dollar removed from the economy, through increased taxation, is one less dollar that can be used to increase the need for labor. So, we produce less jobs because we have to pay more taxes, and when we pay more taxes, only 68% is used to create jobs.

Clearly, a downward spiral ....

 

[Care4all]

One of the main reasons the middle class has been stagnant on their wages IS BECAUSE minimum wage has not risen with the cost of living, and kept low.

Unless at the very top echelon of jobs, salaries are compared to the minimum wage worker....you hold their wages down forever and a day, like we have, then you are only holding down your own salary.

Cost of goods to the consumer can go up more when oil/gas prices go up....

Our continual rising productivity should cover a rise in salaries for near everyone in the middle class.

 

[Spare_change]

One of the main reasons the middle class has been stagnant on their wages IS BECAUSE minimum wage has not risen with the cost of living, and kept low.

Unless at the very top echelon of jobs, salaries are compared to the minimum wage worker....you hold their wages down forever and a day, like we have, then you are only holding down your own salary.

Cost of goods to the consumer can go up more when oil/gas prices go up....

Our continual rising productivity should cover a rise in salaries for near everyone in the middle class.

Sorry --- it doesn't work that way.

Rising productivity means little or nothing to funds available for salaries. The average profitability in products has steadily gone down since the mid-70's. In the mid-80's, we crossed over from cutting production costs to increasing productivity in order to try to maintain a standard level of profitability. It worked for a while, but beginning in about 2002, the percentage of sales income that converted to profit has steadily declined.

When the recession hit in 2008, companies were forced to go back and get more efficient on item production, resulting in increased automation and the elimination of unnecessary labor. Companies streamlined the production and severely cut overhead labor. There has been incentive for companies to go back and bulk up its labor force. They found out they could be very productive with fewer people.

But, let me be perfectly clear - companies will hire people for the price it takes to get them - AND NOT ONE PENNY MORE. Companies are not welfare agencies, and they are not concerned about your lifestyle. They are concerned about one thing only - getting their materials (and your labor) as absolutely cheaply as they can.

Your analysis does not consider the impact of increased prices for products - you are looking at the labor side of the equation only.

 

[Flopper]

If America wants to reduce it's cost of social programs, it's going to have to pay low income workers more.

of course thats idiotic and liberal. If America reduced what it spends on social programs business would have to pay higher wages!! Liberals are 100% stupid. They see how capitalism quadrupled income in China and want America to use socialism even after it slowly starved 60 million death


.

No, that's not what I said and your interpretation is completely illogical. If America reduced spending on social programs that would certainly not force businesses to pay higher wages. However, if employers pay higher wages to low income earners, we won't need the level social programs we have today.

The problem is how do we get higher wages for about 25% of the population. Thanks to globalization and free trade, American workers are in competition with workers in nations whose wages are a fraction of US wages.

As long as you subsidize the low wages I pay, I have no incentive to raise the wage level. Only when the worker demands more, and I can't find others who will do it for less, will the average wage increase.

Don't you realize we are all subsidizing low wages now, Medicaid, Welfare, Food Stamps, and other social programs.

I agree that increasing the demand for workers is the only real viable solution. Probably the best way to do this is with large infrastructure spending that will reduce the slack in the labor pool. Unlike much government spending, infrastructure spending makes America more productive so there is real economic payback..

However, infrastructure spending is only a temporary solution. The basic problem remains. The entry of China, India and the former Soviet Union into the global economy has double the size of the global workforce. Most of these workers have wages in the range of $2 to $5/hr which makes it very difficult for low income earners in the US.

Over the long term, two things must happen to narrow the US wage gap. First, wages must increase in other nations such as China and India. This is happening but it will take many years for the wages in these countries to reach the level of the US worker. Secondly, US low end workers must become more productive to warrant higher pay. That means giving workers the tools they need to become more productive.

As a business owner, I thank each and every one of you for subsidizing my labor costs. But, you get yours in return ... lower prices.

If we increase the minimum wage, or more appropriately, increase the wages of the bottom 10%, the resulting ripple will be felt in middle class homes. If I have to pay more for labor, I will pass that extra cost on to the consumer by raising product prices.

If I raise product prices, the middle class will be faced with two choices: 1) quit buying the product, or 2) pay a larger percentage of your income for the product. Since it is unrealistic to think that people are going to quit eating, or living, eliminating a product from the market is unreasonable. You can,however, expect that people will pay the larger price.

The middle class then will, of course, demand an increase in wages in order to offset the increase in cost of living. Increasing income of the middle class will then result in even higher prices - which means the lower class will need another increase in wages in order to offset the increase in prices.

And, so the cycle goes on ....

The answer is not to increase their wages, but give them opportunity, and the incentive, to increase their position in the job market thru education.

Infrastructure maintenance and upgrade is ballyhooed as being the solution - but, in reality, it would exacerbate the problem, not fix it. Nobody questions that the infrastructure needs to be upgraded. It is almost criminal the way it has been ignored. But, to claim it as a panacea for the poor is simplistic and shortsighted.

Infrastructure upgrade is done with tax dollars - tax dollars that would have to be taken from other programs. Which government programs do you propose we eliminate? The alternatives to that --- borrow the money or increase taxes.

'Increase taxes' seems to be the easiest and most politically acceptable - after all, the majority of people would not be affected (or minimally), and the load would be carried by the top 30% of income earners. However, we need to keep in mind that, of every dollar we remove from the economy, 38% of it goes to operating/maintaining the government oversight. So, only 62% ends up at the production level. In addition, there is the unequal penalty of tax increases - why should one person who drives over a bridge pay $500 a year for the bridge, while the person in the car behind them pays nothing? The concept violates the very essence of our country.

We also need to be aware that every dollar removed from the economy, through increased taxation, is one less dollar that can be used to increase the need for labor. So, we produce less jobs because we have to pay more taxes, and when we pay more taxes, only 68% is used to create jobs.

Clearly, a downward spiral ....

Out of the goodness of your heart, you might choose to pay your employees more if the government didn't subsidize their needs, but I believe most employers would pay wages based on supply and demand in the labor market.

What you're saying is raising the minimum wage will increase inflation. Well, yes and no. It isn't always necessary for companies to push the expenses of a higher-paid workforce onto consumers. Raising the minimum wage can create a temporary or artificial bump in the inflation rate, but so can increases in corporate taxes or a shortage of raw materials.

The presidents proposal is to raise minimum wage $1.75 or about 23%. However this does not mean inflation will increase 23% or anything even close to that figure. The reason for this is wage scales do not increase uniformly. A company whose lowest paid employee is making $11 does not necessary make any change to their wage scales. When faced with an increase in labor cost, businesses do not necessarily raise prices. Some business will just absorb the cost, others will layoff marginal workers, cut other expenses, or some combination of cost saving and revenue increases..

In previous minimum wage increase, it has been very difficult for economist to identify any inflationary impact.

A major Infrastructure improvement program would last for years creating a demand for low income workers plus it would provide stimulus to the economy for a number of years. Over the long term, it will make the nation more productive. A better faster highway and rail system will bring goods to market faster, and improve worker productivity.