Should Walmart Pay More? Other Successful Stores Do

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Now that the minimum wage has moved into the public consciousness, debates again rage over Walmart workers’ pay.

What do you think?

On one side are folks who share the views of business experts who believe Walmart should hire more workers and raise their pay because not only would that lessen the misery of those assigned repetitive, menial work, but because it would give employees incentive to make the company more profitable.

Some experts point to the success of companies like Trader Joe’s and Costco. Adam Davidson wrote in a column in The New York Times:

[At those stores] workers are paid more than at their competitors; they are also amply staffed per shift. More employees can ask customers questions about what they want to see more of and what they don’t like, and then they are empowered to change displays or order different stock to appeal to local tastes. (In big chains, these sorts of decisions are typically made in headquarters with little or no line-staff input.) Costco pays its workers about $21 an hour; Walmart is just about $13. Yet Costco’s stock performance has thoroughly walloped Walmart’s for a decade.

The argument is a more analytical version of one brought forth by journalist Barbara Ehrenreich, who wrote the 2001 book “Nickel and Dimed: On (Not) Getting By in America,” about her failure to lead a productive life while working minimum-wage jobs, including one at Walmart.

On the other side of the argument are people like Doug Altner, an analyst and instructor at the Ayn Rand Institute who wrote a column for Forbes countering arguments such as those raised by Davidson. He wrote:

Well, nobody has to work at Walmart if he feels underpaid or underappreciated. He can always seek another job. So why do 1.4 million Americans choose to work at Walmart, many for well under $12 per hour?

But what about the argument that paying more results in more profitable businesses?

Costco and Trader Joe’s are unlike Walmart in other ways, some say. Megan McArdle wrote in a column for Bloomberg:

In other words, Trader Joe’s and Costco are the specialty grocer and warehouse club for an affluent, educated college demographic. They woo this crowd with a stripped-down array of high quality stock-keeping units, and high-quality customer service. The high wages produce the high levels of customer service, and the small number of products are what allow them to pay the high wages. Fewer products to handle (and restock) lowers the labor intensity of your operation. In the case of Trader Joe’s, it also dramatically decreases the amount of space you need for your supermarket … which in turn is why their revenue per square foot is so high. (Costco solves this problem by leaving the stuff on pallets, so that you can be your own stock boy).

Who’s got it right? Should Walmart pay its employees higher wages? And do you think it should? Imagine the impact on the economy if 1.4 million Walmart workers made more money. Comment below or on our Facebook page.

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Comments & discussion

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  • Steve

    I think that your progressive bias is showing! While some may profess outrage at Walmart’s wages and demand an increase, the overwhelming majority of Americans continue to vote with their feet and their money. At the end of the day, most people are paid what they are worth in terms of skill, training, attitude, and aptitude. If you are lacking in any or all of these areas, figure out how to improve and make yourself more valuable to an employer.

  • Kent

    We actually subsidize Walmart through our taxes. They pay substandard wages and include information about obtaining government assistance along with their paychecks to their workers. This is charity or welfare for corporations that do not need it. We need a constitutional ammendment that enforces corporations to acknowledge all corporate team members with pay that cannot be less than say, 1/50th, of the pay of the highest paid person on that same team/corporation. Walmart and almost all CEO’s are examples of abuses of power. The recent findings that the 85 richest people in the world own more than half of the world’s population is not really any different than the imbalances found in almost every ‘American’ corporation. I say ‘American’ because many of these ‘American’ corporations are chartered in Ireland to avoid paying the taxes that are needed to subsidize their low wage workers. We are all being tested in this life, just not how and when we would like.

  • Toivo Kankkonen

    I think what most folks don’t realize is that the the American taxpayer subsidizes Walmart to the tune of $2.6B (that’s Billion) per year in the form of food stamps, emergency medical care, etc. Because they pay a sub-standard wage, emloyees are given the forms for food stamps when they hire on and by keeping the majority of workers to “part-time”, medical coverage is non-existent. The argument that the workers could go somewhere else is specious. The working poor often don’t have cars, bus routes are often not available, and taxis are not a viable option. Walmart has an entire marketing team that specializes in placing stores that will be the only “big-box” game in town. I’d like to see a study as to how many “mom & pop” and local small businesses go bankrupt when Walmart moves to a location. If Walmart does not make the “forecasted” income within 5 years, they will close the store and a community has a very large “net negative” in terms of taxes and dollars received for the local economy. Want to try a litmus test? Walk through a Walmart store, then go visit a local Costco. Count the number of employees smiling in each store, then note the attitudes of the check-out staff. ‘Nuff said.

  • Frances King Matchett

    I THINK THAT WITH THE JOB OUTLOOK AS IT IS , QUITE A FEW PEOPLE ARE TAKING ANY JOB AVAILABLE, THEY MAYBE OVER QUALIFIED, BUT A LITTLE MONEY ,IS BETTER THAN NO MONEY. IT’S EASY FOR PEOPLE ,WHO HAVE NOT BEEN DIS-PLACED IN THE WORKFORCE, TO TELL SOMEONE ELSE TO WORK SOME PLACE ELSE. WALK A FEW DAYS IN THESE PEOPLE’S SHOES.EVERYTHING BOILS DOWN TO THE ALMIGHTY DOLLAR!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

  • disqus_eslqC70Xbi

    Oh my goodness. The reason people work at Walmart and remain at Walmart is probably because they don’t have but a high school diploma OR there aren’t any other jobs in their area other than minimum wage ones.

    • William Hofmeister

      Or maybe that’s all they can get with their set of work skills. With education and experience you can usually move up. Minimum wage is still for entry level employees and is the first rung of the work ladder.

  • P Roy

    Our family has chosen not to shop at Walmart: They have enough money [below courtesy of Forbes 400]. We go to Target and other dept. and grocery stores to help keep those people employed and those companies in business… think about it.

    net worth, approximate: [That Sam was one hell of a guy!]

    Walton, Christy and family Jackson, WY Wal-Mart ~inheritance~ $35,400,000,000
    Walton, Jim C Bentonville, AR Wal-Mart n/w = $33,800,000,000
    Walton, S Robson Bentonville, AR Wal-Mart n/w = $33,300,000,000
    Walton, Alice L Fort Worth, TX Wal-Mart n/w = $33,500,000,000
    Walton, Helen R Bentonville, AR Wal-Mart n/w = $33,000,000,000