If Wallmart paid a living wage, how much would prices go up?

Walmart employees consume billions in food stamps each year, but raising their wages to a point where they wouldn’t need them anymore would only increase prices by about 1.4 percent

Source: Think Progress, via Portside

Author: Bryce Covert

Walmart prices would go up by mere pennies if it were to pay all of its workers enough to live above the poverty line, according to an analysis by Marketplace and Slate.

In a video, they explain that Walmart employees consume billions in food stamps each year, but raising their wages to a point where they wouldn’t need them anymore would only increase prices by about 1.4 percent:

A single mother working at Walmart is eligible for food stamps if she makes less than $20,449 a year. Industry analysts put the average wage for cashiers at $8.81, or for someone who works typical retail hours of 30 a week, 50 weeks a year, $13,215 a year. Raising that single mom’s wages to $13.63 an hour, however, would push her to a point where she no longer qualifies for food stamps. Doing that for all of its employees would cost the company $4.8 billion a year. Yet if it passed the entire cost on to consumers, it would raise prices by 1.4 percent, making a $0.68 box of macaroni and cheese cost just a penny more.

The video also notes that doing this would save the country millions in spending on food stamps. It notes that in Ohio, for example, as many as 15 percent of Walmart employees use food stamps, meaning that all workers consume about $300 million each year. That sum would no longer have to be spent if its workers simply made more. Including food stamps, Walmart workers at single store consumer around $1 million in public benefits each year.

Researchers have come to similar conclusions. Ken Jacobs, chair of the Labor Center at the University of California, Berkeley, estimated that raising the federal minimum wage to $10.10 an hour would add $200 million to the company’s labor costs. If it passed the entire cost on to consumers, it would increase the price of a $16 item by a penny.

It’s also worth noting that the company could very well decide not to pass the cost on to its shoppers. Jacobs estimates that while some of it might be passed through in higher prices, it’s probably not going to be 100 percent. That’s at least in part because a higher wage means more money for its workers to spend in its own stores, which would increase its sales. The company even told Bloomberg it was considering supporting a minimum wage hike because it would give its customers additional income, although it warned it hasn’t made any decisions on its support. A $10.10 minimum wage would mean $31 billion more in earnings for nearly 17 million people across the country.< /p>

It could also raise wages for its workers with the $7.6 billion it currently spends on buying back shares of its own stock and ensure they all make over $25,000 a year, a level demanded by workers who have repeatedly gone on strike. It gets little value out of the stock buybacks.

Emphasis Mine

See: https://mail.google.com/mail/u/0/?shva=1#inbox/145553270f28bc9a

All of the Arguments Against Raising the Minimum Wage Have Fallen Apart


Source: Nation of change

Author: Joshua Holland

“Conservatives should be on the front line of the battle to raise the minimum wage. Work is supposed to make one independent, but with the inflation-adjusted federal minimum down by a third from its peak, low-wage workers depend on billions of dollars in public assistance just to make ends meet. Just this week, Rachel West and Michael Reich released a study conducted for the Center for American Progress that found raising the minimum wage to $10.10 per hour would save taxpayers $4.6 billion in spending on food stamps.

And even if you break your back working in today’s low-wage economy, it’s exceedingly difficult to raise yourself up by the bootstraps; it’s all but impossible to put yourself through school or save enough money to start a business if you’re making anything close to $7.25 an hour.

But those predisposed to defending the interests of corporate America – including retailers and fast-food restaurants – oppose any increase. That’s tough given that 73 percent of Americans – including 53 percent of registered Republicans – favor hiking the minimum to $10.10 per hour, according to a Pew poll conducted in January.

So those opposed to giving low-income workers a raise offer a number of claims suggesting it would be a supposedly bad idea. Unfortunately for their cause, all of their arguments fall apart under close scrutiny. Here are the ones deployed most frequently.

“It’s a monstrous job-killer”

Big business conservatives crowed when a recent report by the Congressional Budget Office (CBO) projected that a hike to $10.10 might cost the economy 500,000 jobs – never mind that it would have raised the incomes of around 17 million Americans. But a number of economists disputed the CBO finding. One of them, John Schmitt from the Center for Economic and Policy Research, studied years of research on the question, and found that the “weight of that evidence points to little or no employment response to modest increases in the minimum wage.”

We also have real-world experience with higher minimums. In 1998, the citizens of Washington State voted to raise theirs and then link future increases to the rate of inflation. Today, at $9.32, the Evergreen State has the highest minimum wage in the country – not far from the $10.10 per hour proposed by Barack Obama. At the time it was passed, opponents promised it would kill jobs and ultimately hurt the workers it was designed to help.

But it didn’t turn out that way. This week, Bloomberg’s Victoria Stilwell, Peter Robison and William Selway reported: “In the 15 years that followed… job growth continued at an average 0.8 percent annual pace, 0.3 percentage point above the national rate. Payrolls at Washington’s restaurants and bars, portrayed as particularly vulnerable to higher wage costs, expanded by 21 percent. Poverty has trailed the U.S. level for at least seven years.”

“It will hurt mom-and-pop businesses”

Another argument is that it would disproportionately hurt small businesses – giving the Wal-Marts of the world an unfair advantage over mom and pop. But a poll of 500 small business owners from across the country released on Thursday undermines that talking point. The survey, conducted by Greenberg Quinlan Rosner Research for Small Business Majority, found that small business owners support a hike to $10.10 per hour by a 57-43 margin. Eighty-two percent of those surveyed say they already pay their employees more than the minimum and 52 percent agreed that if the wage floor is raised, “people will have a higher percentage of their income to spend on goods and services” and small businesses “will be able to grow and hire new workers.”

“Major costs will be passed along to consumers”

Opponents also claim that higher wages would mean significantly higher prices and that those cost increases would effectively eat up whatever extra earnings low-wage workers ended up taking home. But a 2011 study conducted by Ken Jacobs and Dave Graham-Squire at the UC-Berkeley Center for Labor Research and Education and Stephanie Luce at CUNY’s Murphy Institute for Worker Education and Labor Studies estimated that raising the minimum wage to $12 per hour – two bucks more than what’s currently on the table – would increase the cost of an average shopping trip to Wal-Mart by just 46 cents – or around $12 per year. And another paper published last September by economists Jeannette Wicks Lim and Robert Pollin estimated that a hike to $10.50 an hour would likely result in the price of a Big Mac increasing by only a dime, from $4.50 to $4.60, on average.

If the minimum wage had kept pace with inflation since its inception in 1968 (??)it would now stand at $10.74 per hour. With the share of our nation’s output going to workers’ wages at an all-time low — and inequality on the rise — it’s easy to understand why the idea of raising it to $10.10 is so popular. And despite opponents’ dire warnings, there’s really no good reason that we shouldn’t do so.”

Emphasis Mine

See: http://www.nationofchange.org/print/43566

Separate, and NOT Equal: Incomes in Post New Deal America

Having waited several months to get “unequal democracy” by Larry M. Bartels from the library, I was able to handle the differed gratification when the book finally arrived: it is a treasure.  To most who read this blog, the basics are hardly news, but the supporting facts are deep. 

  o Income inequality has been increasing in the USA dramatically since the mid 70’s

  o It is the product of polices of a system dominated by the interests of the wealthy.

  o Elected officals often ignore the interest of the poor and working poor.

  o The differences have been more dramatic under GOP presidents.

  o  Bush/GOP ‘tax cuts’ of 2001 and 2003, together with the erosion of the minimum wage, have widened the have/havenot gap.

  o Few Americans are aware of how vast the disparity is.

Mr. Bartels, of Princeton University, also offers an explanation of why voters often appear to vote against their interests: deception and disingenuousness, not values: “Do abortions and gay marriages matter when the cupboard is bare and the sheriff is auctioning off the furniture in the front yard?”

Some of this situation has changed since the Great Uprising of  November, 2008, because the majority were motivated, regeristered, and mobilized to vote, but the inequality is still there.

Stay tuned…

Published by Princeton University Press, 2007