Because almost all economists will tell you that would be disasterous to the economy. Most will say that $9/hr isn’t going to destroy the economy, and we have lots of experience where small raises to the MW didn’t seem to do any harm.
Think of it as a no-overhead welfare program for the working poor. It may not be the best way to do this, but it probably isn’t the worst, either. We’ve been doing it for decades, and we’ve been doing OK.
Selling cheap crap that breaks and need frequent replacement rather than lasting several years requires more materials to make the replacement items.
And Ford understood you need to pay workers enough to buy the products he produced.
It would be disastrous for the economy for the same reason a small increase is bad for the economy. There are always marginal cases, the absurdity of a 90$ minimum wage shows that. If there was a $90 minimum wage most people would lose their jobs because it would not be profitable to employ them. If we change the minimum wage to $9 a few people would lose their jobs because it would not be profitable to employ them. The principle is exactly the same it is just that in the second instance only a couple hundred thousand people would lose jobs instead of tens of millions so those people can be ignored.
It is only no overhead for the government, the businesses that can’t hire the workers they need and the workers that can’t get hired pay the price.
So politicians get to pat themselves on the back for their compassion and while business owners and the poor suffer, liberalism in microcosm.
I agree, I would also add that the cheapest way of building products, as the chinese are finding out, is often disastrous for the enviornment, which people need to live in. Its also cheaper to cut corners and bribe/game the system.
I’ve had wheelbarrows rust from the INSIDE out!!! I try and avoid buying products from countries, mostly China, where these problems seem endemic.
Germany seems to have a much better way of dealing with these issues than the US does.
Ford understood he needed to pay his workers enough for them to stick around because turning your work force over three times a year is bad for profits. That is why he created the 8 hour workday and doubled his workers salaries. In pursuit of profits. How many times a year do you think a worker bought a car from Ford?
Ford had 13,000 workers and sold 300,000 cars, unless each worker is buying a car a month, then his workers buying cars was a very small part of his business.
What made Ford great was his mania for efficiency brought the price down so that ordinary people could afford them. That is the same motivation that made Walmart such a huge company.
I am not really a fan of the MW, and if we were starting from scratch, I probably wouldn’t support it. But we do have it, and if we don’t index it to inflation, we’ll have to increase the amount of money we spend on welfare. We are not the type of society that is going to let people live in abject poverty.
I don’t want to hijack this thread so this is the last I will say about it. The minimum wage already causes us to spend more on welfare. If someone is being payed 8$ per hour plus welfare then raising the MW will cause him to lose his job and he will need more welfare. Plus for most people MW employment is entry level into the workforce. Fewer entry level jobs because of MW means fewer people entering the workforce and more long term welfare cases.
And I’m not going to argue with you because I more or less agree with you. Unlike you, though, I recognize the reality that the MW isn’t going away. And we’ve not seen that any measurable increase in unemployment results from very small changes to it, so I think it is reasonable to support the policy of raising it to cover inflation, even if I wouldn’t have wanted a MW originally. That train, though, left the station decades ago.
Some interesting facts:
Walmart directly employs about 1% of the US workforce (1.5 million workers).
The 6 members of the Walton family, heirs to the Walmart fortune, have a total wealth of $93 billion – more than the bottom 30% of Americans combined.
The Walton family controls nearly 50% of WalMart stock and receives $2 billion/year in stock dividends alone.
Walmart has received more than $1.2 billion in tax breaks and other subsidies as of 2007.
Then Walmart should be able to stay profitable without crying for more tax breaks and subsidies. Or the Waltons will just have to get by on being slightly less mega-wealthy.
More details, please. I’m all about cutting tax breaks and subsidies, but I need to know that they actually exist before I jump on the wagon.
Share prices are a bad way to evaluate the health of a company. First, they represent the marginal price of one share, which really only represents a prediction as to the future marginal price. Second, they are largely unrelated to the inherent value of a corporation’s assets and finances.
Nobody in the secondary securities market really knows how closely a stock price approximates a company’s value. The only people who know are insiders, and they have millions of reasons not to tell anyone else.
Granted, but in that case the OP’s linked doom-and-gloom article beginning “Wal-Mart shares are tanking” is pretty much just random alarmism, the OP’s dire economic forebodings from this phenomenon have even less evidentiary support than they originally appeared to, and we can all shrug and move on to some more productive debate.
Tanking shares are just one data point. The article also points to (apparently) taking sales, which are a much bigger one.
Agreed.
This is not directed at you, btw:
And say what you will about WalMart, unless they are actually breaking any laws, I can’t fault them. If we think we need better laws to prevent alleged wrong, but legal, actions, then let’s see what those laws are and what their consequences would be.
Besides, I hate defending WalMart because I never shop there. I don’t like the experience, but obviously a lot of people do!
That’s a bit much. Not having a reasonable alternative =/= enjoying the experience.
If all the Walton family money was put toward employee salaries it would amount to an extra dollar an hour,
25% of Americans have not net wealth so my kid has a higher net worth than they do when he gets money from the tooth fairy.
If politicians want to give away free taxpayer money, I blame them and not the people who line up to get it.
My sister “likes” WalMart on Facebook! :eek:
You can generalize this into all the resources that WalMart get other people to pay. In addition to the some (but not all) cases where resources are wasted on cheaply-produced crap that breaks, you have the sprawl effect where WalMart
a) builds on cheap, (or even subsidized but I don’t have a cite for that) land that may be cheap in price but still has the same environmental, traffic, and infrastructure impact that land closer to consumers would have, and
b) causes customers to expend resources to get to said faraway store.
Do you really want to get into a debate of: “Resolved, a lot of people enjoy the WalMart experience”? 
93,000,000,000 divided by 1,500,000 = 62,000 per employee. Assuming 2,080 hours per year (which of course we can’t) that’s a dollar an hour over perhaps thirty years.
No, but if you think people shop at Wal-Mart because they enjoy it, be my guest.