Over thanksgiving several protesters (about 50) were protesting wages at WalMart. I am for people earning money. But Peter Suderman makes some economic points that those who are not well schooled in economic things may not be able to understand. I will also disclaim this, I am not an apologist for WalMart... but economics are economics.
From Mr Suderman:
1. Walmart’s customer base is heavily concentrated in the bottom income quintile, which spends heavily on food.
2.The bottom income quintile spends about 25 percent of income on food compared to just 3.5 percent for the top quintile.
3.So the benefits of Walmart’s substantially lower prices to the lowest earning cohort are huge, especially on food.
4. Obama adviser Jason Furman has estimated the welfare boost of Walmart’s low food prices alone is about $50b a year.
5.Walmart’s wages are about average for retail. Not amazing. But not the worst either.
6. Paying Walmart’s workers more would mean the money has to come from somewhere. But where?
7. Erase the Walmart CEO's entire salary, and you can raise average hourly wages by just a penny or so.
8. Erase the entire Walton family fortune and you get an average $1/hour boost to Walmart workers.
9. Raise prices to pay for increased wages and you cut into the store’s huge low-price benefits for the poor. It’s regressive.
10. But what about Costco? They pay more, right? Yes, but it’s a different, smaller market.
11. Walmart’s average customer earns roughly $35k. Costco’s average customer earns about $75k.
12. Costco only has about half as many employees as Walmart. What would happen if Walmart adopted a Costco model and shrank to Costco size?
13. Not at all clear that the remaining half of Walmart workers would be better off. Many would almost certainly be worse off. Unemployed.
14. Obama econ adviser Jason Furman did a lot of the work on Walmart's progressive benefits. His case: slate.me/R3bkc2
15. Finally, as someone who's actually been a regular, small-town Walmart shopper, I'd like to argue for its community benefits.
16. Yes, some small stores close when Walmart opens. But in small towns, Walmart can become real community hubs - more so, because of size.
17. As for Walmart workers getting health benefits thru Medicaid, that's due in part to a policy liberals argued for: wapo.st/axXXNE
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