Tags: Wal-Mart | minimum | wage | increase

Wal-Mart Could Benefit From Minimum-Wage Increase

By    |   Friday, 06 September 2013 09:22 AM

Many corporations say raising the minimum wage would prompt job losses, yet companies like Walmart might actually benefit from increasing the minimum wage, The Huffington Post argues.

If low-wage workers have more money, some studies indicate, they'll end up spending it at stores targeting low-income shoppers, such as Wal-Mart.

"Wal-Mart caters to workers on a budget and they can expect that if those workers get an increase, they will spend the money in their stores," Catherine Ruetschlin, a policy analyst at Demos, a left-leaning public policy organization, told The Post.

Editor’s Note:
New Video: Obama Plans to Redistribute Seniors’ Wealth

"These low-wage workers are the real job creators in the economy. They're the people that go out and spend."

Retailers like Wal-Mart have been hurt as consumer spending is compressed by higher gas prices and flat real wages.

"The consumer doesn't quite have the discretionary income, or they're hesitant to spend what they do have," Charles Holly, Wal-Mart's chief financial officer, said in a conference call last month.

"If suddenly all these low-wage workers have more income, they are likely to spend that money right away," David Cooper, an economic analyst at the Economic Policy Institute, told The Post. "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."

Wal-Mart has not taken an official position on the wage increase, but CEO Bill Simon criticized "arbitrary" minimum wages in article for The Huffington Post.

"Not only is it based on a fundamental misunderstanding of labor markets, it doesn't address the real issue — the lack of good jobs in the middle," he wrote. "And it fails to understand the role of entry-level jobs, including those in restaurants, hospitality and retail, as a starting point — a chance to build skills and begin taking on bigger jobs."

The impact of minimum-wage increases is one the most analyzed and controversial economic topics.

"The weight of that evidence points to little or no employment response to modest increases in the minimum wage," states a report from the Center for Economic and Policy Research.

Studies by the National Federation of Independent Business (NFIB) show raising wages would increase unemployment and increase prices.

"It puts up barriers to job creation," NFIB spokeswoman Cynthia Magnuson told The Washington Post.

Editor’s Note: New Video: Obama Plans to Redistribute Seniors’ Wealth

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Many corporations say raising the minimum wage would prompt job losses, yet companies like Walmart might actually benefit from increasing the minimum wage, The Huffington Post argues.
Wal-Mart,minimum,wage,increase
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2013-22-06
Friday, 06 September 2013 09:22 AM
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