Thursday, April 01, 2010

Wal-Mart Sometimes More Selective Than Harvard

April 1 (Bloomberg) -- Harvard University admitted a record-low 6.9 percent of students seeking undergraduate admission after attracting the most applications ever, including almost 3,600 from seniors ranked first in their high school. Harvard College offered admission to 2,110 of this year’s 30,489 applicants. Last year, the Cambridge, Massachusetts, college accepted 7 percent."

Harvard is obviously very, very selective when offering admission to its applicants, but at least on some occassions, Wal-Mart is even more selective when offering jobs to its applicants.

(Crain's, January 2006) — The new Wal-Mart Stores location opening Friday in suburban Evergreen Park, Illinois received a record 25,000 applications for 325 positions, the highest for any one location in the retailer’s history, a company official says. Wal-Mart's Chicago-area manager Chad Donath said generally stores receive between 3,000 and 4,000 applications for about 300 to 450 positions.

That would mean Wal-Mart accepted only 1.3% of job applicants at its Chicago store, making it harder to get a job at Wal-Mart than gain admission to Harvard University. Of course, Wal-Mart's normal acceptance rate is closer to 10%, making it slightly less selective than Harvard on average.

Bottom Line: Just like Harvard has to be a pretty desirable place to attend college since it gets more than 14 applications for every opening, Wal-Mart must be a pretty desirable place to work if it routinely gets 10 applications for every job opening. And yet the standard assumption is that Wal-Mart's wages are unreasonably low. A Google search of Wal-Mart and "low wages" results in 47,000 hits.

But with Wal-Mart receiving 10 applications per position, you could actually make a stronger case that Wal-Mart's wages are actually TOO HIGH. That is, Wal-Mart could lower its wages considerably and still have too many applications.


27 Comments:

At 4/01/2010 1:06 PM, Anonymous rasananda said...

Nice Post.
To be very frank your blog is better sometimes.Then my Seo Service Blog

 
At 4/01/2010 1:28 PM, Anonymous Former GMU Student said...

You have a point but this analogy destroys your otherwise correct argument. So you should be aware of defending a good idea with faulty logic because you will lose the battle to those sharper with logic but defending the wrong idea.

This is what your opponents will tell you ... and conclude that you are wrong:

You should really compare the pool of applicants to Harvard (top of the class) to the pool of applicants to WalMart (everyone at the bottom of the class).

Now imagine what would happen to the application rate to Harvard if the deadbeats also applied (which they rationally don't because they know they have no chance). But the same deadbeats think they may have a good chance with WalMart.

 
At 4/01/2010 1:29 PM, Anonymous Anonymous said...

Meant "acceptance rate at Harvard" in the last para.

 
At 4/01/2010 1:29 PM, Blogger James Fraasch said...

I guess to the people who work there, the wages are just fine.

People will only work for what they think their employment is worth.

Of course, it might have something to do with the economy:

http://seattletimes.nwsource.com/html/dannywestneat/2011421840_danny24.html

Over 260 people applied for a single position to be a part-time kennel pooper-scooper.

From the article:

There are past customer-service reps from WaMu, AT&T, J.C. Penney and Sprint. A slew of retail clerks and cashiers, as well as out-of-work waiters. The biggest group, by far, is dozens of laborers, construction workers, landscapers and maintenance workers.

I don't get how their will be a V shaped recovery when the job market is this bad and keeps remaining this bad. Formerly fully employed construction workers/bankers/etc, are begging to find part-time work scooping poop.

James

 
At 4/01/2010 1:46 PM, Anonymous Benny The Man said...

I suppose some may find humor in so many people applying for part-time, non-benefits work at a large stable employer.

But believe me, there are a lot of sad stories to tell when 25,000 people apply for 325 positions at Wal-mart.

I am glad Dr. Perry finds the situation so uplifting. Must be a lot of yucks going on with the Harvard crowd.

 
At 4/01/2010 1:53 PM, Blogger Jet Beagle said...

"it might have something to do with the economy"

Not sure that economic conditions make any difference in Walmart applications.

The 25,000 applications referred to above were received at the Evergreen, IL, store in 2006. That was well before the start of this current recession.

Walmart for decades has been receiving hundreds if not thousands of applicants at every store it opens. For example, consder Wal-Mart's first store in Los Angeles

"When it opened one of its first Los Angeles–area stores in the Panorama City mall, Wal-Mart had 7,000 job applicants during its first week."

Walmart's Panorama City store opened in 1998, during the height of the 1990's economic boom.

 
At 4/01/2010 1:57 PM, Anonymous gettingrational said...

If you are considering a career at Wal-Mart the please try and get a degree from Harvard first. Then maybe your time at Wal-Mart, post-graduation, will result in a supply chain that Sam Walton would approve of -- U.S. made products. The boneheads that run the company or live on their Wal-Mart inheritience do not have the smarts Sam had.

Please consider some of FAQs about Harvard:

"What percentage of faculty members teach undergraduates?
Virtually 100 percent."


"
Is it possible to talk with and get to know professors?
Yes. In addition to professors' weekly office hours, students spend time with their professors before and after class. There are also many occasions when professors take meals in Harvard's residential dining halls; attend gatherings in the residences of House Masters, who are themselves Harvard faculty members; and participate in other programs and special events."


"
How large are courses?
Some introductory courses as well as several other very popular courses attract large enrollments. Yet, of the 1,284 courses offered last fall, 1,022 of them enrolled 20 or fewer students."


"
What is Harvard's graduation rate?
Harvard graduates 97 percent of its students, among the very highest graduation rates in the nation. We are certain that everyone admitted to Harvard has the ability to complete all academic requirements successfully."

 
At 4/01/2010 1:58 PM, Blogger Jet Beagle said...

Benny the Man: "there are a lot of sad stories to tell when 25,000 people apply for 325 positions at Wal-mart."

Perhaps, but what evidence do you have supporting the implication that these applicants are experiencing any difficulty? The alternate explanation - that workers desire the stability, pay, and working environment Walmart offers - is just as plausible.

 
At 4/01/2010 2:00 PM, Anonymous Anonymous said...

Benny the man: What ever problems there are with the economy or the workforce are not wal mart's fault.

GMU student, the point was not to make wal mart seem elite. The point is this: we conclude that Harvard is a good place to go to school since many want to go there relative to those who get to go there. So, wal mart must be a good place to work since they, too, turn many away.

 
At 4/01/2010 2:19 PM, Anonymous Anonymous said...

Maybe WalMart could run the public schools....maybe government in general...

 
At 4/01/2010 2:21 PM, Blogger Jet Beagle said...

gettingrational: "The boneheads that run the company or live on their Wal-Mart inheritience do not have the smarts Sam had."

Well, let's look at some some evidence. Sam Walton died in August, 1992. We can compare Walmart's financial results for 1992 and 2009:

WalMart growth after Sam Walton

1992 sales - $43.9 Billion
1992 net income - $1.6 Billion

2009 sales - $401.2 Billion
2009 net income - $13.4 Billion

It is true that Walmart's return on shareholder equity is no longer at 30% levels when it was much smaller. But their current ROE of 21% - achieved during the worst global recession in many decades - is nothing short of admirable.

I do not believe the shareholders of Walmart consider the executives in Bentonville to be boneheads.

 
At 4/01/2010 2:21 PM, Blogger Jason said...

Does Harvard have an application fee for undergrad admissions? If so, I wonder how Walmart's numbers would fare if they had a similar fee.

 
At 4/01/2010 3:10 PM, Blogger Ron H. said...

This comment has been removed by the author.

 
At 4/01/2010 3:22 PM, Blogger Ron H. said...

Note to self:

Advise grandson to consider carefully if applying to GMU.

Although a prestigious school with many outstanding alumni, including Mark Perry, Walter Williams, and Don Boudreaux,GMU also produces former students who are elitist snobs and who tend to spout nonsense in blog comments.

 
At 4/01/2010 3:53 PM, Blogger misterjosh said...

Benny, Where is Dr. Perry indicating he feels the situation to be uplifting or humorous?

It's a straightforward factual post giving information that indicates that Walmart might not be the evil empire so many make it out to be. The evil empire I used to think it was.

I'm not as big a fan as Mark, but I don't hate it any more.

 
At 4/01/2010 4:54 PM, Anonymous Lyle said...

One interesting question on your view of Wal-Mart might be the size of town or city you live in. In my county of 40k Wal-Mart provides the lowest prices, and as good as a selection as other retailers. When you live in the big city Wal-Mart does not have as much of an advantage, given the much greater set of choices.

 
At 4/01/2010 7:35 PM, Blogger sethstorm said...

Desperation meets a captive market. When their hand is forced to apply to a limited set of choices, this kind of thing happens.

This can also be used as a way to kill off criticism. Use the threat of volume of applications, and you've got the ability to project force.



But believe me, there are a lot of sad stories to tell when 25,000 people apply for 325 positions at Wal-mart.

They don't stop just because they're able to be accepted. Given how things are, they can afford to lord over people w/o worry of complaint.

 
At 4/01/2010 8:15 PM, Blogger juandos said...

"Desperation meets a captive market. When their hand is forced to apply to a limited set of choices, this kind of thing happens"...

Maybe that alledgedly 'captive market' should have some free market worth (needed job skills for instance) so desperation and captivity won't run rampant through these poor folks...

 
At 4/01/2010 10:13 PM, Anonymous Dimetap said...

I thought I'd drop in to see if the quality of programming had improved. Nope, same level of stupidity.

Millions of high school seniors and tens of millions more who didn't get a high school diploma KNOW they are not qualified to get in, so they select not to apply. This, despite "a record number" of applicants.

Wal-Mart, on the other hand, is well within the qualifications of millions of potential applicants and tens of thousand willing and able to work there. It is the size of Wal-Mart's applicant pool, not their "selectivity" which makes the hiring to applicant ratio so low.

I shouldn't expect good analysis from the dumbest Econ PhD on the internet. Please defend yourself by falling on the "April Fools" defense.

 
At 4/01/2010 10:18 PM, Blogger juandos said...

"Wal-Mart, on the other hand, is well within the qualifications of millions of potential applicants and tens of thousand willing and able to work there. It is the size of Wal-Mart's applicant pool, not their "selectivity" which makes the hiring to applicant ratio so low"...

Geez! Another pseudo benny...

 
At 4/01/2010 10:22 PM, Blogger Ron H. said...

>"They don't stop just because they're able to be accepted. Given how things are, they can afford to lord over people w/o worry of complaint."

Is this Harvard applicants you are referring to here?

I can understand that the thousands of top students who are not admitted must be pretty desperate and feel like captives. If they can't get into Harvard, their only remaining option is probably to apply for jobs at Walmart.

>"This can also be used as a way to kill off criticism. Use the threat of volume of applications, and you've got the ability to project force."

I couldn't agree more!

When those Harvard rejects are also turned down at Walmart, they may use a volume of applications to kill off criticism with their ability to use projectile vomiting with force.

 
At 4/01/2010 10:33 PM, Blogger W.E. Heasley said...

Wal-Mart is merely a private company providing retail services to the general public at low cost.

People freely contract their labor with Wal-Mart. Wal-Mart’s business model, to a large extent , is based on offering part-time positions to the supply of part time job seekers.

The labor Wal-Mart attracts comes in many varieties: first time entry level employees who acquire first time job skills, part time workers who want a part time job such as retirees, home makers with a semi flexible schedule, people working a full time job that want to make additional income in a part time position.

Or you can take the anointed/intelligentsia view that big is bad and hence Wal-Mart is not a retailer but merely a destructive force as they are large.

The anointed/intelligentsia view is that part time work is a terrible lot in life. That all work was intended to be full time with large benefits, hefty retirement plans, a life time position, and of course liberal vacation time and flex time.

Former GMU Student said…

”You should really compare the pool of applicants to Harvard (top of the class) to the pool of applicants to WalMart (everyone at the bottom of the class).

Now imagine what would happen to the application rate to Harvard if the deadbeats also applied (which they rationally don't because they know they have no chance). But the same deadbeats think they may have a good chance with WalMart.”



Unlike certain GMU grads who fashion Wal-Mart labor as “deadbeats”, in my humble opinion any person willing to work is a “winner”. Of course, my alphabet of letters is a winner: WVU.

 
At 4/01/2010 10:54 PM, Blogger Ron H. said...

Darn it Heasley, there you go making sense again. I was having fun with the NONsense.

>"Unlike certain GMU grads who fashion Wal-Mart labor as “deadbeats”

You may have assumed something not in evidence here. I see no reason to believe "Former GMU Student" is a graduate, indeed, I suspect he or she is a dropout, who may have failed economics.

Such bitter people could be expected to troll econ blogs, especially if they also failed to secure employment at Walmart due to their poor attitudes.

 
At 4/01/2010 11:13 PM, Blogger W.E. Heasley said...

Ron H.

You are right, spoiled the “No-sense”! Will cut out the common sense straight away!

Will hence forth only come up with No-sense as if I’m Jared Bernstein (the ultimate non-economist economist). You know, Jared Bernstein, the Double Bass grad from the Manhattan School of Music.

Will that work?

 
At 4/02/2010 12:29 AM, Blogger Ron H. said...

>"Will hence forth only come up with No-sense as if I’m Jared Bernstein (the ultimate non-economist economist). You know, Jared Bernstein, the Double Bass grad from the Manhattan School of Music.

Yikes! Maybe you had better stick to being sensible.

I knew I had heard that name somewhere, but I had to double check. Chief Economist and Economic Policy Adviser? No wonder Biden sounds so incoherent.

I suppose having a degree in double bass is good enough. Nothing from Washington makes economic sense anyway, so we can at least have music.

Do you suppose he won that coveted position for his keen economic acumen, or did someone owe him a big favor?

 
At 4/02/2010 9:53 PM, Anonymous Anonymous said...

•selective - characterized by very careful or fastidious selection


Has nothing to do with the number of applicants.

If you insist it has something to do with the number of applicants then Harvard has fewer applicants because it is known to be more selective.



Hydra

 
At 11/07/2011 11:02 PM, Blogger Economics and Wal-Mart said...

Question to the group: Consumer Reports asked over a 1000 people to rate Wal-Mart on Staff Courtesy it's average rating was 1 out of 5. This seems weird given that so many people apply to Wal-Mart. When 25,000 people apply to work at Wal-Mart and only 325 are hired, is Wal-Mart purposely hiring 325 unfriendly people? Why isn't Wal-Mart getting a quality (in terms of politeness to customers) staff when it has such a selective hiring process?

 

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