Would a higher minimum wage be good for business at Walmart? Many experts say soâ€”after all, a higher minimum wage would give many Walmart customers a littleÂ more disposable incometo 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 theyâ€™d spend that money at low-priced outlets like Walmart.â€śIf suddenly all these low-wage workers have more income, they are likely to spend that money right away,â€ť Cooper said. â€śIf 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.â€ť […]
The data linking an increase in wages to a rise in consumer spending — particularly at a specific retail outlet — is a bit thin, but thereâ€™s â€śvery strong anecdotal evidence in support of that claim,â€ť 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 hasÂ explicitly saidÂ 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was a problem: “The U.S. minimum wage of $5.15 an hour has not been raised in nearly a decade, and we believe it is out of date with the times … Our customers simply donâ€™t have the money to buy basic necessities between paychecks.”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 isâ€”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.
This article originally appeared on Daily Kos LaborÂ on September 4, 2013. Â Reprinted with permission.Â
About the Author: Â Laura ClawsonÂ is the labor editor at Daily Kos