The public thinks the average company makes a 36% profit margin

The actual numbers are a LOT lower. In this study, “…the average profit margin for the most recent quarter was 7.5% and the median profit margin was 6.5%.” That demon corporation Walmart realized only 3.1% in the most recent quarter, and “Big Oil” was below average at only 5.1%.

“The public’s complete overestimation of how much companies earn in profits as a share of sales explains a lot. If $36 of every $100 in sales at a company like Walmart, McDonald’s, Home Depot, Ford Motor Company or a local dry cleaner or restaurant really did turn into profits, then of course those companies could afford to pay unrealistic living wages of $15 per hour, accept unreasonable demands from labor unions, provide all sorts of generous fringe benefits including weeks of paid holidays, long paid maternity leaves, and gold-plated pension programs, etc. The public that believes in the fantasy-world of sky-high 36% profit margins would naturally think companies are just being greedy and stingy when they don’t pay higher “living wages” and have to be forced to do so through minimum wage, or living wage, legislation.”

walmart