Was the push for an unrealistic minimum wage why Walmart is closing hundreds of stores?

Walmart truck cc

People love to hate Walmart. I have some issues with the company too, but typically not the same issues as the people who loathe that Walmart has remained union free all these years.

Generally I think Walmart does a good job at what it’s supposed to do and that is to offer quality goods at very reasonable prices.

Indeed lives are made better by Walmart in many respects. Food, clothing, electronics are all made more available at lower prices to everyday people because of the company. The company probably does far more good than bad. With the exception of small towns where it has in some cases hollowed out the old retail centers.

But places like Walmart operate on relatively thin margins. Their business is not Ferarris, it is diapers. However, activists (many union activists) have agitated in urban areas for minimum wage increases which are outside of reality. Often with an eye toward non-union Walmart. As such Walmart, at least in some places, has realized that it can no longer afford to do business in many of these areas. This is a particular shame as these areas are often the type of places which could use a Walmart most.

What people who want a much higher minimum wage need to understand, and this is critical, is that just because the government mandates that a minimum wage should be $15 that doesn’t mean that the work done by people who currently work for $10/hour is suddenly worth $15/hour.There’s no magic economics ferry that makes it so.  It just means that many people whose work is worth $10/hour are now unemployable. They lose their jobs. Which is what appears to have happened with at least some of the Walmarts which are closing.

(From The Independent Women’s Forum)

In D.C., Walmart is abandoning plans to build two superstores in two of the city’s poorest neighborhoods. This was part of a move to bring Walmarts to the city. Against union pressure, city officials agreed to let Walmart open stores anywhere in the city as long as they built two stores in the Southeast part of the city, home of deep poverty and crime. Three stores were opened in gentrifying neighbors and, apparently, haven’t been as profitable as Walmart expected. However, behind closed doors Walmart officials were more frank as the Washington Post reports:

Council member Jack Evans (D-Ward 2), head of the council’s finance committee, sat in on the meeting Friday morning with Walmart officials and Brian Kenner, Bowser’s deputy mayor for planning and economic development.

Evans said that, behind closed doors, Walmart officials were more frank about the reasons the company was downsizing. He said the company cited the District’s rising minimum wage, now at $11.50 an hour and possibly going to $15 an hour if a proposed ballot measure is successful in November. He also said a proposal for legislation requiring D.C. employers to pay into a fund for family and medical leave for employees, and another effort to require a minimum amount of hours for hourly workers were compounding costs and concerns for the retailer.

Click here for the article.


Source

"What's Going on with Those Walmart Closures?" Patrice J. Lee, IWF.org, 2016-01-19.

Nick Sorrentino

About Nick Sorrentino

Nick Sorrentino is the co-founder and editor of AgainstCronyCapitalism.org. A political and communications consultant whose clients have spanned the political spectrum, his work has been featured at Chief Executive MagazineBreitbartReason.com, NPR.com, Townhall, The Daily Caller, and many other publications. He has spoken at CPAC, The Commit Forum, The Atlas Summit, The US Chamber of Commerce, The National Press Club, and at other venues. Sorrentino is the CEO of Exelorix Consultants and a senior fellow at Future 500. A graduate of Mary Washington College he lives just outside of Washington DC where he can keep an eye on Leviathan.