Wal-mart recently released a press release that it intends to create about 10,000 jobs in the US. The press release feeds into President Trump’s position that companies need to create more jobs in the US. On first glance, that is good news.

According to Nandita Bose and Sruthi Ramakrishnan of Reuters this would represent less than 1% of its US workforce of 1.5 million. Many of the new employees will include hourly employees (the bulk of them part time workers), some full time managers and supervisors in 59 stores the company expects to open. The stores are part of a $6.8 billion capital budget which will include construction jobs.

President Trump tweeted he was happy the jobs are coming.

A little bit of reality, Amazon recently had a banner year with its e-commerce, Wal-mart is still far behind and has let thousands go it can focus more on e-commerce. The next reality is many of the jobs at Wal-mart will be part-time starting at the minimum wage or within a $1.00 of it. Minimum wage is $7.25 in Nevada and generally less than $12.00 a hour across the country. Part-time work is 28 hours or less (7.25 x 28 hours is a gross of $203), that income is not going to stimulate spending in the country. Given the size of Wal-mart, an increase in 10,000 jobs while individually a good thing, the reality is the company is essentially not growing.

The other reality check is many of the items in the store come from China or South east Asia. Every time President Trump mentions tariffs, it will mean higher prices at Wal-mart and other stores. Will Wal-mart be lobbying the government not to include retail items?  In seems there are some cities devoted to supplying Wal-mart stores, what happens to them? will China sit on its hands?  Will Wal-mart start sourcing in the US, remember the buy in the US campaign, the main thing in the store was the store is a an American owned company, not the goods inside the store were not American-made. What will the reality be?

Linking to dividend paying stocks, Wal-mart is a leader in the retail space and similar to all large organizations can easily send out announcements which on the face of it seem to be good. It is good Wal-mart is growing; the not so good aspect is that is slow growth rate and although it is a giant in retail, there are many challenges. Read the press releases for the good news, but then look behind the headline to what it really means for the company.

There are more  questions than answers, till the next time – to raising questions.