Walmart’s Argument Against Paying More Doesn’t Impress Everyone

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Walmart gave Washington, D.C., an ultimatum: Leave wage requirements low or we won’t come there.

The company said it wouldn’t build three stores and may ditch three more already under construction there if the D.C. Council passed a bill requiring that large retailers pay no less than $12.50 an hour, instead of Washington’s minimum wage of $8.25. The law “would result in fewer jobs, higher prices and fewer total retail options,” Walmart regional general manager Alex Barron wrote in The Washington Post.

The bill passed on July 10, and the threat changed nobody’s mind on the council, the Post says. The mayor has yet to sign or veto it, but the deadline to decide is here: The mayor has 10 calendar days excluding weekends to consider bills, the city website says.

Fast Company asked experts to assess Barron’s argument, and they refuted his key points.

Fewer jobs? Nope. A 2011 Center for Economic Policy Research study found that when San Francisco, Santa Fe, N.M., and Washington, D.C., raised their minimum wage, employment was unaffected. Higher wages offset high turnover and reduce hiring costs, National Employment Law Project policy analyst Jack Temple told Fast Company. The strategy works for Costco.

Higher prices? Negligible. Another 2011 study, this time from the Berkeley Center for Labor Research and Education, tested almost exactly this scenario — an across-the-board minimum wage increase to $12 an hour, rather than D.C.’s proposed $12.50, Fast Company says. The result was a 46-cent increase per shopping trip per customer, while workers would see an extra $1,670 to $6,500 per year.

Actually, a wage increase would probably save taxpayers money. A more recent report from U.S. House Democrats found that Walmart’s low pay qualifies some workers for government services for the poor, Fast Company says. For example, one Walmart store cost Wisconsin taxpayers more than $900,000 a year for Medicaid.

Fewer retail options? As council member Vincent Orange told the Post, “We’re at a point where we don’t need retailers. Retailers need us.”

What do you think? Can Walmart afford to pay a higher minimum wage for workers at a few D.C. stores? Is it going to abandon its investment in the area over the extra pay? Share your thoughts on our Facebook page.

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  • MBurris

    The Wal Mart story has several facets.
    The first is that I really hate to see me be on the side of a socialist dictatorship such as the DC government. (Statehood? seriously?)
    The second is that minimum wage standards have been woefully behind the times for a long time. Like so many well intentioned ideas or programs, it was never kept up to date and now is so far behind in inflation terms that any substantive increase appears radical. The minimum wage was to have been a floor. Now it is so far behind that business types would be a fool to not embrace the law, because it has become a very profitable ceiling rather than a floor that wages cannot exceed. THE COMPANIES THAT FIGHT MINIMUM WAGE INCREASES THE MOST AND FINALLY RELENT TO PASSED INCREASES HAVE GROWN THE MOST, NOT HAD THEIR GROWTH RESTRICTED. MacDonalds still grows. Walmart still grows. Fast food eatery after fast food eatery grows. Retailers expand, buy each other out, add departments, etc. and fuel absurd increases in upper level salaries and benefits. Where did the money come from? From those on the bottom. And they find even more and more ways to get those in middle management closer to the bottom with the sledgehammer of them possibly joining the ranks of those on the bottom. And this is also enabled by governments, state, local, and federal that have many rules and regs to protect safety, employment practices and benefits but increasingly fail to actively enforce or even investigate the many, many breaches.
    Washington needs to grow a pair and do what the law was intended to do many , many years ago. The top has to lead and quit all of the fakey trash talking. Catch the standard up across the board. Eliminate the profitalility of putting a person part time rather than full time( if they work 20 hours then they get that proportion of contibution toward their medical or vacation or whatever……hard to do? Then don;t play games to keep people out of the mainstream. There are incentives for some kinds of behavior and disincentives for other kinds of behavior. Let them earn their billions.) I’m about as conservative as they come. Iwouldn’t be a Democrat if they paid me. I wouldn’t be a double talking Republican if they paid me. This issue isn’t about them or us. It’s about all of us. I’m a registered Independent and it’s going to take some one in Washington that can look both parties in the eye and say this minimum wage mess needs cleaning up. We’ve been talking about if for too many years.

    • nitemare2

      You seem to miss a couple of important points. The DC, Ca. and NM reports all said there was no change in unemployment rates The report was backed by Costco which is a unionized company. So anything they say would to me be tainted towards forcing others to meet their wages and benefits. Now to say it would not affect unemployment rates is a false assumption on the part of those making it. The facts is if DC forces this issue Wal-Mart has already said they will not build all the stores they had planned to causing a loss of 1800 jobs. How many companies have done the same in the past? Can you tell me with any knowledge which companies have expanded at the rate and areas they have wanted to? You make the minimum wage sound like it’s for a career job position, it never was and is not supposed to be. It is a entry level or part time pay scale. You want to pay some high school kid $12.45 plus benefits for a job while going to school? You want to pay a person receiving a pension that much for part time work? You make a statement about benefits paid for by the employer for 20 hrs. a week and say you are not a Liberal. How much will Obama care cost the employer for full time employees? So you want a benefit package paid by the employer and higher wages and then say let the make their billions, McDonalds still grows and their prices have increased and their portions have decreased, as has much of the products in the stores does this tell you anything about business. The stock market increases and money is made not because of any turn around in the economy but the fact of Obama and Bernanke pumping $85 billion into it each month.

      The new job numbers for the last couple months that the Liberals have been saying were so good where actually a large percentage part-time. That is the way the President seems to want the country and that would give him more people on the govt handout and under his and the liberal control. When I see statements like this used in an article it makes me leery about the bias of it “A more recent report from U.S. House Democrats found” , it should read as they found what they wanted it to say. They ended with a Quote from a council member who when asked in another interview as to why the City of DC did not follow the $12.50 wage rule with it’s own employees, said well they all make that much when you figure in benefits. But that is not what they or you want they and you and the liberals want PLUS You may be Independent but you are not conservative.

      • Laqudis

        Walmarts in Germany are unionized, their employees receive pensions, 36 paid days off a year and those stores are doing quite well in spite of it. It’s in the U.S. where Walmart is so firmly entrenched in the political system that they can get away with employing workers and then handing them a pamphlet on how to enroll for welfare benefits.

        • nitemare2

          We are not in Germany and our unions are not the same as European run unions. The economy is different and the whole of Europe has just gone through a recession and had riots to keep the benefits they receive even though there are less taxpayers because of these benefits. Very few companies in the US give 36 days paid vacation to employees with less than 15 years with a company. Please worry about Germany and let us worry about the US. Wal-Mart is not a job that requires a high education level, most employees are part time many are either students or senior citizens supplementing their retirement who already have Medicare, most full time are Management and would not be covered under a union anyway and these employees receive healthcare, pensions and paid vacation. No one makes them work there, no one makes anyone shop there that is what a free country and true capitalism is about the freedom of the people to work and shop where they want without interference from outside sources. You don’t agree with Wal-Mart’s way of business go else where and shut up. I would tell the ones crying to the unions the same thing, If I work there why should I be forced to pay a union leader to go on vacation or buy a big car? I was a union member for over 20 years and it made me mad every time I saw my dues paid to a politician I did not agree with, they are nothing more than legalized extortion groups!

  • Reba Gilbert

    Unfortunately, low wages have contributed to the fact this nation is quickly headed for a “third world” status. Many people who are making these low wages find themselves at food pantries, using food cards and going without necessities in life… These are the working poor who find themselves on “the system.” Minimum wage laws were to formed to prevent this type of abuse. But, unfortunately, the federal government has not kept up…..$8.50 can buy 2 gallons of gas or better yet one gallon of gas, a loaf of bread and a pound of hot dogs. Forget toilet tissue! Large corporations should not abuse their employees. If they cannot afford to pay the employees a decent wage, then corporate restructuring may be their answer. I believe, as a nation, we can turn this around; but it will take work. This is an investment for our future. I am all for capitalism, and I also believe that a man who works, should be given a fair wage.

    • Sompopo Pepper

      Since most Walmart employees I have ever seen do nothing and know nothing about the products they sell, I would say eight dollars an hour is about right. Hard work is not their forte.

  • pxbart

    MBurris – I think you have hit the mark. I don’t recall in economics that capitalism was a process that restricted growth. That whats happening with the massive separation of wealth distribution. I am also a moderate conservative but I am also compassionate for those who are just workers.They need to be taught to do a certain task and paid a livable wage. It makes sense that a happy employee is more loyal and hard working. For those who abuse this benefit, they can be replaced but that type of insidence will decrease quickly when they find they can’t hold a job.

  • mark james

    any body heard of supply and demand, make yourself indispensable and get promoted and get a raise. raising the minimum is actually another form of entitlement that creates a modern day slave state.

  • Vash Stampede

    This has all to do with an understanding to what an employee actually brings into the job as a return compared to the wage they are paid. You have entry level positions which are never scarce for new talent, don’t require any advanced knowledge or previous experience, and give the opportunity to grow within a company and by that grow ones earnings and personal marketability. Why do they have to increase the wages? Why is it the burden on the employer to improve a persons economic condition? Rather than attacking a business that saves citizens more money on food, clothing and furnishings than any other business prior to it we should work to increase economic activity around the country to spur business growth.

    This whole argument about increasing to a living wage is nonsense. Prices go up, employment suffers and those two factors have a disproportionate impact on the very same entry level and low income workers these so called social activist want to help. The glaring problem with the studies and your article are using San Francisco and Washington D.C. as your variables for the reduction of employment rate. If you honestly think those two markets represent the country as a whole considering the disproportionate employment levels and experience among typical employees than it shows yet again the same people demanding changes haven’t a single clue on what they’re talking about.