Walmart is a different story. Where oil companies that are involved in exploration, production and refining can move some operations around (i.e. only explore and produce in certain regions of the world, refine in others), retailers have to do business in the country they sell stuff in. Looking at Walmart's numbers $255 billion of revenue is US producing $18.5 billion in earnings (7.2%), while their overseas operations have $98.6 billion in revenue and $4.9 billion in earnings (5%); or operations in the US are almost 50% more profitable than overseas. This may be partly due to the newness of the overseas markets, but if you delved into the numbers I think you would find that the majority is due to the US having the largest population of middle class with income to spend at Walmart. Furthermore, as long as market saturation hasn't occurred (yet another discussion), Walmart would be wise to continue expansion on the more profitable US market.
The bottom line is that the DOW stocks had earnings of $373 billion in 2008 and paid 31% of that in income taxes. So, that $373 billion for the companies to "give back" to the people is now $257 billion. It turns out that $111 billion is "given back" in the form of dividends. Of course these are the wrong people receiving the money according to some. Dividends go to shareholders. Not only that, within a class of stock, shareholders all get the same amount. So Sam Walton's heirs get paid the exact same amount as I do. They just own a larger percent of the company than I do. And the shareholders do deserve that $111 billion. In many cases that is the reason they bought the stock. Remember Rule #1! The business is in it to make money. Turns out, the investor is in it to make money as well. When investors buy stock, all of their money is at risk. If Walmart went bankrupt, I would lose all of my money invested in it. There is no protection. As such, investors expect to get a return, either in the form of increased stock value or dividends (or both).
So, governments got 31% of the earnings of the DOW, investors got 30% of the earnings, that leaves 39% of earnings to figure out where they are and if the providing higher wages or health care would have been better. There are three major categories that this money can be spent on. First, operations. Paying off loans on equipment and buying more inventory. Both of these can be good things. Paying off loans can reduce the financing expense which will increase profits later. Increasing inventory in a growing business is important to stay ahead of orders (having more orders than one can fill is a bad thing, because customers don't like having to wait to get what they ordered). Second, investing. This can be capital expenditures (new equipment) or investments (stocks, bonds, real estate, etc.). Both of these are good things too. Capital expenditures are used to increase productivity and generate more earnings (plus, that equipment is bought from another company which affects their bottom line). Investments provide capital to other companies such that they can spend it on one of the three categories. Third, financing activities. Dividends actually fall into this category. As does buying stock. All of the stock that a company gives to its employees has to be bought from the market (so, yes, many companies own a portion of themselves). A company cannot just snap its fingers and make new shares of stock. It has to tell the market it is going to make new stock and how much (which usually results in a decrease in the current price of the stock such that the market capitalization remains roughly constant. Additionally, if a company doesn't have earnings or left over money from previous years, then it can borrow money. Borrowing can be a good thing as long as the return on that money exceeds the finance costs.
So, in a nutshell, the left over earnings are used to expand the company (i.e. generate more earnings the next year). This is exactly in line with Rule #1. A company does not exist to provide jobs or health insurance. They exist to make money. If it is necessary to provide jobs or health insurance in order to make money, then the company will do it.
So what would be wrong with raising wages or providing more health care with the extra earnings? Well, to begin with, you would need to take that money from one of the other two uses: dividends to shareholders or re-investing in the company. Let's look at these two options.
Let's use Walmart as an example. Walmart had after tax income of $13.4 billion. Roughly $3.75 billion was paid out in dividends and $10 billion was reinvested in the company. Walmart has 2.1 million employees. We could probably assume that 2 million of these are the stockboys, cashiers, etc, that are usually championed as the poor who Walmart is walking all over. $13.4 billion divided evenly among these 2 million would be $6700 more for wages or benefits (which includes the necessary taxes that have to be paid - sorry you can't short change Uncle Sam). Since Walmart is usually chastised since it doesn't pay a wage that will support a family of 4 (that the positions it has were never intended to support a family of 4 is irrelevant), lets look at what benefit an employee would get.
For a moment let us pretend that Walmart is going to give everyone a $3000 raise and provide health insurance for the other 50%. Assuming that all 50% are providing for a family of 4. Health insurance from employers for a family costs on average $13000 a year. There is only $3700 per person left over after the raise so, the employee would have to pay $9300 - $5000 more than the raise that Walmart gave them! Even if the employee is single, the cost is $7200, requiring him to fork out $3500 almost as much as his raise. If you are relatively healthy and you got to choose whether you had health insurance (which you may not use) or $3500, which would you choose? I actually had the opportunity to make this choice. I chose the cash.
In the end, whether the employees would "benefit" from having these profits is meaningless. They have no claim on them. Employees have essentially made a contract with the company for X wages and Y benefits in exchange for Z work. Regardless of how profitable (or unprofitable) a company is, all that is owed employees is X +Y as long as they provide Z. The investors on the other hand, have complete claim on the earnings of the company. They own those earnings. The shareholders elect the board of directors which ultimately decide how that money is reinvested. So, if you are an employee and believe you are being unjustly treated you have a couple of options:
1) Quit. Why are you working for a company that treats you like garbage? (Oh, maybe they really don't your just jealous and greedy and want something that you don't deserve).
2) Buy stock. Now you own the company. At the next meeting, put forward a proposal to distribute earnings to the employees rather than the shareholders. I'm sure that will be well received.
3) Continue to whine. This is usually the option that is chosen.
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