Must We Subsidize Walmart?
Is a living wage a good thing?
- Do higher wages cost jobs because businesses fire workers?
- Or, do higher wages create spending? Leading to more sales and profits and a stronger economy?
- And will a living wage usher in a $10 hamburger?
First, stop worrying about $10 dollar burgers.
Prices won’t rise much
Some estimate that a living wage would entail a 17% surcharge at McDonald’s. So a meal could rise from $5.49 to $6.38. I’m personally willing to make the sacrifice so that someone can have a living wage.
Economy is better, long term
On the other two questions, time frame makes a difference in the answer you get.
Initially, some companies can’t afford higher wages and fire workers. So short-term, unemployment can rise.
But most companies either pass costs onto customers or absorb the costs.
And that’s not so hard to do when:
The worker-to-CEO pay ratio has increased 1,000 percent since 1950.
So CEOs have a little wiggle room to dock their own pay so that workers can afford to live.
And, if Walmart paid a living wage they wouldn’t need to hand out food stamp applications to new hires. Since we taxpayers fund food stamps, we end up subsidizing the Walmart family fortune.
Meanwhile, a living wage helps the whole economy.
You can’t spend money if you don’t have money, so sales stall or slide when a community has low wages.
Low pay increases political and business instability
Even the Wall Street Journal has posted articles fearing that the rising gap between rich and poor will lead to political and business instability.
When the poor have extra money they buy more clothes and food, and they fix appliances… Businesses hire to meet the increased demand. The new hires then spend more money, and the economy spirals upwards.
Meanwhile, when San Jose, California voted to raise its minimum-wage opponents predicted doomsday. But a year later business grew and unemployment dropped.
So living wages tend to boost economies in the long run.
Even better, they are humane.
And no one who works full-time should be living in poverty.
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