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Would a higher minimum wage be good for business at Walmart? Many experts say so—after all, a higher minimum wage would give many Walmart customers a little more disposable income to spend at the store:
David Cooper, an economic analyst with the left-leaning Economic Policy Institute, agrees with Demos's Ruetschlin that the sluggish economic recovery means a boost in the minimum wage could push low-income workers to spend more, and in many cases they’d spend that money at low-priced outlets like Walmart.

“If suddenly all these low-wage workers have more income, they are likely to spend that money right away,” Cooper said. “If these retailers want strong, stable sustainable growth in the U.S. economy, then they should also want strong, stable increases in wages to their employees.” [...]

The data linking an increase in wages to a rise in consumer spending -- particularly at a specific retail outlet -- is a bit thin, but there’s “very strong anecdotal evidence in support of that claim,” said Jared Bernstein, a senior fellow at the nonpartisan Center on Budget and Policy Priorities and a former economic adviser to Vice President Joe Biden.

Walmart definitely knows that when its customers don't have money, business suffers; the company's chief financial officer recently said, to explain a drop in U.S. sales, that "The consumer doesn't quite have the discretionary income, or they're hesitant to spend what they do have." And in fact, in the past, when the minimum wage has gotten too far below the poverty line, a Walmart CEO has explicitly said that was a problem: "The U.S. minimum wage of $5.15 an hour has not been raised in nearly a decade, and we believe it is out of date with the times ... Our customers simply don’t have the money to buy basic necessities between paychecks."

A yacht store is unlikely to see much of a boost from an increase in the minimum wage, in other words, but Walmart, where people go for cheap, basic necessities, will do better. Walmart's opposition to paying an actual living wage, one that doesn't force workers to rely on food stamps and Medicaid, is well known. But if Congress doesn't act and raise the minimum wage, we might get back to a point where Walmart admits it would benefit from an increase. Which would, more than anything, be a sign of how embarrassingly bad Congress is—can you imagine lagging behind Walmart on wage issues?

Join Making Change at Walmart and Daily Kos in telling Walmart and the Waltons to respect their employees and pay a real wage.

Originally posted to Daily Kos Labor on Wed Sep 04, 2013 at 05:59 AM PDT.

Also republished by In Support of Labor and Unions and Daily Kos.

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Comment Preferences

  •  It will be voted down by their board of directors. (5+ / 0-)
    Recommended by:
    boran2, Shippo1776, HeyMikey, JeffW, BadKitties

    Instead, they will lower their prices on cat food.

    Ayn sucks. Please know I am not rude. I cannot rec anything from this browser. When I rec or post diaries I am a guest at some exotic locale's computer.

    by Floyd Blue on Wed Sep 04, 2013 at 06:09:18 AM PDT

  •  No, It would help Walmart Employees some though. (1+ / 0-)
    Recommended by:
    JeffW

    Even if they start paying a decent wage now, I still won't shop there.

    -6.38, -6.21: Lamented and assured to the lights and towns below, Faster than the speed of sound, Faster than we thought we'd go, Beneath the sound of hope...

    by Vayle on Wed Sep 04, 2013 at 06:12:27 AM PDT

  •  When I started working in 1969, (3+ / 0-)
    Recommended by:
    RiseUpEconomics, Brian A, JesseCW

    the minimum wage was either $1.60 or $1.65 (I forget which). Taking the lower figure, that would be equal in real dollars to $10.16 now:
    http://www.calculatorsoup.com/...

    The proposal for a minimum of $10.10 should therefore be regarded as the moderate position. The WalMart and fast food strilers are doing what some here have called "moving the goalposts" or "shifting the Overton Window", as the right-wingers have been doing in the opposite direction.

    •  I was making $1.60 and hour in 1969. (1+ / 0-)
      Recommended by:
      Aunt Pat

      I think my husband was making $135/week. Of course our rent was only $85/month and gas was about $.35/gallon.

      “The future depends entirely on what each of us does every day.” Gloria Steinem

      by ahumbleopinion on Fri Sep 06, 2013 at 06:54:18 PM PDT

      [ Parent ]

    •  supply side (1+ / 0-)
      Recommended by:
      kamarvt

      A lot of this has to do with the conservatives irational dedication to supply side economics, and desire to punish people who see money as a deity.

      Giving more money to rich people, as has been clearly shown, does not help the economy.  One opens a factory, employ 100 people, but produce a million widgets, and the factory closes if there is no one to buy them.  Which is what we saw in the mid 80's.

      Giving money to those a living at a near sustenance level, however, immediately results in a massive growth of income on many levels as the money works it's way through the retail chain, and results in a healthy profit for the firms that supply what the people really want.  Which is what, I think, the conservatives really hate. I can see them lying up at night thinking someone, somewhere, might be having fun spending some of their stolen government money on beer, which would help McCain, but everyone else frowns on it.

      If we stop seeing money as a reward, but merely as a way a tool, and allow the free market to run, instead of allowing conservatives to pick and choose who they believe is the moral choice, life would be much better.  Raise the minimum wage.  If people get laid off, give them enough to survive. If Walmart is not smart enough to keep up, they will go away, like K Mart of Sears, and be replaced with someone else.

      •  conflation of moralities (0+ / 0-)

        You make a good point about the concept of money as reward. It's a better explanation than mine; that of the two ways to capture more money, investment vs profit taking, big business always goes for #2 because it's a more direct route. The problem with my theory is it assumes the moneymakers are either unaware or unconcerned that it is unsustainable.
        However, I'm not entirely willing to give up my belief that money-driven people are capable of serious cognitive dissonance, stupidity, and greed.
        "A rising tide lifts all boats" they like to say. What better example than raising the minimum wage?

        Last full month in which the average daily temperature did not exceed twentieth-century norms: 2/1985 - Harper's Index, 2/2013

        by kamarvt on Sat Sep 07, 2013 at 03:49:27 AM PDT

        [ Parent ]

  •  No, this does not ring true. (0+ / 0-)

    If Walmart paid each of their workers another $1000, say, only some fraction of that would work its way back to them in the form of additional sales. Say that 100% of the after-tax compensation is used to buy goods at Walmart (as unlikely as that is). So about $800 of the $1000 is spent there, and Walmart. Walmart earns a gross margin of about 25%, and net margin of about 5%. So they'd make a $200 profit on those sales prior to expenses, and about $40 (pre-tax) after expenses. But they paid out $1000 pre-tax to begin with!

    •  Employees at other workplaces (5+ / 0-)

      would earn more and spend more there, as well.

      I'm living in America, and in America you're on your own. America's not a country. It's just a business.

      by CFAmick on Wed Sep 04, 2013 at 07:17:20 AM PDT

      [ Parent ]

    •  I think you're assuming that all of WalMart's (3+ / 0-)
      Recommended by:
      Crider, Kimbeaux, Justanothernyer

      business would come from its own workers. Most of the shoppers would of course come from other employers, so WalMart would still be helped by a higher minimum wage even if it spent more on its own payroll.

      "I'm a pessimist because of intelligence, but an optimist because of will" - Antonio Gramsci

      by ewmorr on Wed Sep 04, 2013 at 07:22:21 AM PDT

      [ Parent ]

    •  Sixty Percent of All Americans (0+ / 0-)

      ...shop at Wal-Mart once per week.  The less money you make, the more likely you are to shop there.  Obviously a raise to ONLY their employees wouldn't increase their profits, but most of their customers aren't their employees.

      •  Really? I find that number to be shocklingly (0+ / 0-)

        high.

        •  Well, I found Walmart proganda that: (0+ / 0-)
          Every month more than 60 percent of Americans shop at Walmart
          link

          (which I'm still dubious about, but perhaps * that * is possible)

          •  Don't fall for the semantics... (0+ / 0-)

            Even if 60% of all Americans shop at Wal Mart each month, it doesn't mean they're ALL doing ALL of their shopping, or even a significant amount of their shopping, there.

            I'll give you a personal example. I was looking for something that was more or less an impulse buy. I say "more or less" because I wanted to try it out right away, but couldn't find what I was looking for, but didn't want to order it from Amazon just to be able to physically return it if it didn't work for me. It was a bluetooth receiver, something I could use with my phone in my car and my home stereo, neither of which uses bluetooth. Found one at Best Buy, it didn't work. Looked at other various stores, including Best Buy-esque electronic stores, warehouse club stores, office stores, cell phone stores. No luck. Wal-Mart had it. It was the only thing I bought, and even being the only person on line at the electronic counter, it took me over 5 minutes to check out because the person on the counter was on the phone, and the guy trying to help him out didn't know how to use the register. If I decide not to keep it I shudder to think what returning it would be like; better pack a book and some snacks and make a day out of it.
            But the point is, I bought ONE thing, but hey, I'm now like 60% of Americans who will shop at Wal Mart this month. I buy occasional other items, usually DVDs and small toys for the kids, but it's never a whole grocery trip, just little things here and there. I can count on one hand - one finger, actually, the times I've shopped there and spent more than 100 bucks.

            Maybe I'm an anomaly. But I'm willing to wager a decent chunk of the 60% each month number is comprised of people like me, who aren't buying everything we need, but something(s) we can't find anywhere else and it's just convenient at that moment.

            You know you're winning a fight against a Republican when they stop mocking your position and start whining about your tone.

            by slappymagoo on Fri Sep 06, 2013 at 07:44:31 PM PDT

            [ Parent ]

  •  Henry Ford had the right idea (7+ / 0-)

    If you make a car that is expensive and the plaything of the rich, you can make a lot of money.

    If you make a car that is reasonably priced for ordinary people, you can make a whole lot of money.

    If you make a car that is reasonably priced AND pay your workers enough money so they can buy a car, you can make yourself a ton of money!

    "That being said, I do agree I am going to hell. But for other reasons. Mostly boring tax stuff ' Amy Pohler

    by Annie B on Wed Sep 04, 2013 at 06:51:47 AM PDT

  •  of course this oney has to come (0+ / 0-)

    from somewhere. If money is being added to those workers, money is also being subtracted somewhere else.

    Walmart would likely raise prices to pay for the extra salary and so Walmart customers would be paying more for the same stuff, and have to cut back on some of their spending.

    Walmart employees better off. Walmart customers, less well off.

    An analysis of the effect has to look at both sides and the 2nd/3rd order effects.

    •  They could take less profit (2+ / 0-)
      Recommended by:
      Kimbeaux, JesseCW

      The Walton family members are among the richest people on the planet, they can surely afford it. But I don't expect that they will choose to do so.

      That's why we need some Robin Hood taxes where we take from the richest 1% and give to the 99%.

      "Imagine all the people, sharing all the world." --John Lennon. Follow me @riseupeconomics

      by RiseUpEconomics on Wed Sep 04, 2013 at 08:01:00 AM PDT

      [ Parent ]

  •  Quite a lot of the business the walmartians do is (1+ / 0-)
    Recommended by:
    JesseCW

    with an older demographic.  Any Wednesday when the Social Security payments hit the bank accounts you will find them jam packed.

  •  Diary and the Action Item (1+ / 0-)
    Recommended by:
    Roadbed Guy

    The Diary is about how raising the minimum wage as a nation would help Walmart. The Action item at the end is about telling Walmart to raise wages for their company. These are 2 very different things.

    •  Different but the same. If Walmart raised (0+ / 0-)

      its wages it would not only stop opposing a minimum wage increase but actually support it. Walmart's current opposition is a big reason why an increase has not passed.

      Further, affiant sayeth not. 53959

      by Gary Norton on Wed Sep 04, 2013 at 08:11:16 AM PDT

      [ Parent ]

      •  Action (1+ / 0-)
        Recommended by:
        Roadbed Guy

        The Action item should then to ask WM to support a minimum wage increase rather than asking them to increase wages.

        •  What I am saying (0+ / 0-)

          The diary presented an argument about how a minimum wage increase would help Walmart. If the action item is about WM increasing wages then the diary should have presented an argument about how WM increasing wages will help WM.

          I have nothing against asking WM to raise wages - but it doesn't follow from the diary.

          •  Walmart's low wages act as a lid on wages for (1+ / 0-)
            Recommended by:
            Twa Corbies

            lower income workers across the board.  If Walmart raised wages, other companies would be under some pressure to raise wages to compete for the same workers.  More money in workers' pockets, especially lower income workers, means more money to be spent at Walmart.

            “The future depends entirely on what each of us does every day.” Gloria Steinem

            by ahumbleopinion on Fri Sep 06, 2013 at 06:59:31 PM PDT

            [ Parent ]

  •  I like the rhetorical exercise (1+ / 0-)
    Recommended by:
    JesseCW

    but I don't think it's the case; with upward pressure on wages, a lot of its customers would go somewhere like Hy-Vee, or Meijer, or Target. What many people forget is that actually shopping at Wal-Mart is a relatively unpleasant experience - I've gone at several different times of day and night and rarely had to wait in line for less than ten minutes. This, in addition to the disorganization and inferior products on the shelves - many people would rather shop elsewhere, and with wages going up, they'd be able to.

    "Pillows, but no sleep / Feathers, but no birds." | Pro-transit young black urban progressive | SSP/DKE | -9, -7.79 | NJ-05 - ! | Yard signs don't vote.

    by gabjoh on Wed Sep 04, 2013 at 08:54:49 AM PDT

  •  A decent livable minimum wage of 11 an hour (0+ / 0-)

    or more would provide a lot of people the means to shop elsewhere, and would not benefit Wal-Mart.

    Some bullshit slap-in-the-face fuck the poor 9 dollar an hour  locked to inflation forever pro-permanent mass poverty move would probably benefit them.

    "But the traitors will pretend / that it's gettin' near the end / when it's beginning" P. Ochs

    by JesseCW on Wed Sep 04, 2013 at 09:47:07 AM PDT

  •  DC efforts to increase the min wage for big box (0+ / 0-)

    retailers is a mistake.

    DC should raise the min wage, regardless of employer and all employers should have the same minimum wage in the city.  No employer should be favored by having a lower min wage for her business - regardless of size.

    DC should index this wage to the relative cost of living in DC compared to the lowest cost of living city in the US - which has the National Min wage.

    Fortunately most of the cities in the US with the highest cost of living are run by elected Democrats.  These cities should have their own min wage adjusted for their higher cost of living.

    The most important way to protect the environment is not to have more than one child.

    by nextstep on Wed Sep 04, 2013 at 10:17:05 AM PDT

  •  Costco demonstrates (0+ / 0-)

    that paying better wages at Walmart and Sam's Club, and also investing in training, would increase profits directly, because Costco workers are more productive and better able to help customers and Costco warehouse stores are better stocked. Harvard Business Review reported on this years ago.

    The High Cost of Low Wages

    Ceterem censeo, gerrymandra delenda est

    by Mokurai on Wed Sep 04, 2013 at 05:18:05 PM PDT

    •  Problem solved, then. If this is true, Costco (0+ / 0-)

      will grow at the expense of Sam's and Walmart.  Eventually, if Sam's/Walmart don't follow suit with higher wages and better training, they won't exist.

      •  Assuming a completely free market. (0+ / 0-)

        Oh, and that a "free market" works the way it does in the Econ 101 textbooks.
        And that Costco is as ubiquitous as WalMart.
        And that they are both operating from the same starting point in time such that neither has any built-in advantages from being first in the market with a dominant market share. None of which are true.

        "Lone catch of the moon, the roots of the sigh of an idea there will be the outcome may be why?"--from a spam diary entitled "The Vast World."

        by bryduck on Sat Sep 07, 2013 at 09:22:48 AM PDT

        [ Parent ]

  •  its simple economics (0+ / 0-)

    people spend disposable income.
    there are not enough wealthy people to keep the economy vibrant and since the 99% are the engine that runs the economy when they have less disposable income the economy is stagnant as it is now.
    raise the minimum wage, make the wealthy pay their fair share of the tax burden and have the 99% pay less and the economy will thrive, keep on the same path and we will duplicate what the czars did in russia, it wasn't pretty there and it won't be pretty here.

  •  Or !!! (0+ / 0-)

    Their employees can take on a second or third job. I mean really, paying a reasonable wage is so wasteful for the free market capitalist that flourishes on the misery of others.

    -7.5 -7.28, A carrot is as close as a rabbit gets to a diamond.-Don Van Vliet

    by Blueslide on Fri Sep 06, 2013 at 07:34:14 PM PDT

    •  W admired that purely American (0+ / 0-)

      fortitude, so it has to be good.

      take on a second or third job
      (Not snarking at you, but with you.)

      "Lone catch of the moon, the roots of the sigh of an idea there will be the outcome may be why?"--from a spam diary entitled "The Vast World."

      by bryduck on Sat Sep 07, 2013 at 09:24:20 AM PDT

      [ Parent ]

  •  I don't think so. To test this argument at its (1+ / 0-)
    Recommended by:
    WillR

    logical extreme, forget $11 an hour or $15; let's say all typically lower-income jobs now pay $1 million dollars per year.  How much will a McDonald's hamburger cost?  A shirt at the local thrift store?  An oil change?  Within a very short period of time, the stores would be bankrupt and the employees out of work.

    On a much smaller, but still incremental scale, this is exactly what happens when employers are forced to pay a wage higher than that which an employee would otherwise accept.  

    The answer isn't a forced wage that will drive up prices and cause less employment, but a far better system of education and training.

    •  Reductio ad absurdum much? (0+ / 0-)

      There is surely a sweet spot where profit and pay can coexist on the other side of poverty from where we are now. In fact, we know there is because we had it for a larger majority of our population for decades.
      Education and training don't mean jack if there aren't any jobs to be had for living wages available to the newly educated and trained--which is the economy we now have. Or do you really think there are non-service "industry" positions going unfilled by the millions due to a lack of qualified applicants?

      "Lone catch of the moon, the roots of the sigh of an idea there will be the outcome may be why?"--from a spam diary entitled "The Vast World."

      by bryduck on Sat Sep 07, 2013 at 09:28:21 AM PDT

      [ Parent ]

      •  This is not at all an example of reductio ad (0+ / 0-)

        absurdum.  This is taking an argument to its logical extreme.

        Where is the "sweet spot" on pay and cost?  Do tell.  And please include the arguments/calculations on how you came to the number.

        Regarding well-paying positions going unfilled due to a lack of qualified applicants, there are many thousands.  I saw an article a few years ago with a recruiter from Ratheon stating they had 1200 engineering positions they couldn't fill.  In every company I've worked for in the last 10 years, we've had IT contractors from India, who, due to the immigration costs, are more expensive than American employees.  These companies don't want to pay extra, but if this country doesn't produce enough talent, it has to come from elsewhere.  For an American citizen with a four-year degree in any technical or scientific field, the current unemployment rate is zero.  Our country is full of out-of-work Psych. majors, but this is absolutely not the case with Chemistry, Chemical Engineering, Electrical Engineering, Computer Science, etc.

        I'd add that this is also the case with tradesmen.  In most parts of the country it is difficult to find a high-quality welder or electrician, and these folks can make $30-40 an hour.

        We have too many people graduating high school with no skills at all, and too many college graduates with no skills other than to manage a Subway or try to examine someone's feelings.

        •  Taking an argument "to its logical (0+ / 0-)

          extreme" is a form of reductio ad absurdum.

          If you don't think there is such a sweet spot, you must be unaware of 20th Century US history, given that the period between the 1930s and 70s saw one benefit a vast middle class here. I shouldn't have to prove its existence any further than that, to one open to historical evidence.

          Hearing that a corporation can't fill openings tells me that they had lowballed their position's salary package beneath what qualified candidates expect and/or deserve. If you expect people to take those jobs, congratulations! You just agreed to our race to the bottom . . .

          I would like to see your proof regarding the unemployment rate of sci-tech workers.

          Your denigration of people who don't meet your definition of "skilled" is also noted.

          "Lone catch of the moon, the roots of the sigh of an idea there will be the outcome may be why?"--from a spam diary entitled "The Vast World."

          by bryduck on Mon Sep 09, 2013 at 02:39:39 PM PDT

          [ Parent ]

          •  Oh, please don't "note" my denigration of people (0+ / 0-)

            who don't meet my definition of skilled.  What would I do?  

            Where did I do that?

            You still aren't telling me what the "sweet spot" in hourly wages is.  Why hold out this critical information?  Don't let individuals and employers decide - that's too much freedom - so tell me the "sweet spots" for places like Walmart, Target, Costco, the local barbershop, the gas station around the corner, etc.

            Taking an argument to its LOGICAL extreme is not a form of reductio ad ABSURDUM.  Get a book.

  •  Santa Fe has the 2nd highest minimum wage in the (0+ / 0-)

    country - $10.29. Its enactment did not cause Walmart to flee. In fact: after it went into effect they opened a SECOND, super Walmart within the city limits. We also have every other big box retailer you can think of, except Costco.

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