If Walmart Paid its 1.4 Million U.S. Workers a Living Wage, it Would Result in Almost No Pain for the Average Customer

[Usui Takumi 1,562]

Yeah, afterall who wants cheap consumer goods?

The net loss of jobs would be questionable by area. Each Wal-Mart stores has quite a number of employees. Where a mom and shop store might have 10 employees at most (and that is being generous) Wal-Mart would have 200 in one store? That's not including the McDonalds or Subway they put in there, the nail salon, the eyeglasses shop, etc...

Analyzing national data, the study found that the opening of a Wal-Mart store reduces county-level retail employment by 150 jobs. Because Wal-Mart stores employ an average of 360 workers, this suggests that for every new retail job created by Wal-Mart, 1.4 jobs are lost as existing businesses downsize or close. The study also found that the arrival of a Wal-Mart store reduces total county-wide retail payroll by an average of about $1.2 million. This study improves substantially on previous studies by convincingly accounting for the endogeneity of the location and timing of Wal-Mart's entry into a particular local market. That is, Wal-Mart presumably does not locate stores randomly. When expanding into a particular region, it may, for example, opt to build in towns experiencing greater job growth. Unless this location selection bias is accounted for, one might compare job growth in towns that gained Wal-Mart stores versus those that did not and erroneously conclude that Wal-Mart caused an expansion in employment. The authors of this study have devised a persuasive method of accounting for this bias. They also argue that the method developed by Basker (see next item below) to account for this bias is flawed and therefore her conclusion that Wal-Mart has a small positive impact on retail employment is not reliable.

David Neumark (University of California-Irvine), Junfu Zhang (Clark University), and Stephen Ciccarella (Cornell University), IZA Discussion Paper No. 2545, Jan. 2007

Often cited and typically misrepresented by Wal-Mart supporters, this study examines the impact of the arrival of a Wal-Mart store on retail and wholesale employment. It looks at 1,749 counties that added a Wal-Mart between 1977 and 1998. It finds that Wal-Mart's arrival boosts retail employment by 100 jobs in the first year—far less than the 200-400 jobs the company says its stores create, because its arrival causes existing retailers to downsize and lay-off employees. Over the next four years, there is a loss of 40-60 additional retail jobs as more competing retailers downsize and close. The study also finds that Wal-Mart's arrival leads to a decline of approximately 20 local wholesale jobs in the first five years, and an additional 10 wholesale jobs over the long run (six or more years after Wal-Mart's arrival). (Wal-Mart handles its own distribution and does not rely on wholesalers). This works out to a net gain of just 10-30 retail and wholesale jobs, and the study does not examine whether these jobs are part-time or whether they pay more or less than the jobs eliminated by Wal-Mart. The study also found that, within five years of Wal- Mart's arrival, the counties had lost an average of four small retail businesses, one midsized store, and one large store. It does not estimate declines in revenue to retailers that survive. Basker looked at the effect of Wal-Mart on retail employment in neighboring communities, but found that the confidence intervals were too large (meaning the results showed wide variation) to draw any conclusion about Wal-Mart's impact. (Her initial working paper, published in 2002, reported an average decline of 30 retail jobs in surrounding communities, but, after correcting an error, she determined the confidence intervals were too large to produce a precise result.)

By Emek Basker, University of Missouri, Review of Economics & Statistics, February 2005

[Ban Hammer 13,352]

If you don't like what Walmart pays then don't work there.

quit making sense!

[Usui Takumi 1,562]

If you don't like what Walmart pays then don't work there.

or shop there. I've been walmart free for nearly a year. I realize now how the silly the place is. I ordered a heater from there and it took walmart 30 min just to clear it from the system so i could take it. I then ran and grabbed a can of spray and got in the queue. After waiting 15 minutes, I got to the front and the debit card machine stopped working. Instead of taking care of the issue the woman told me to go to another line (I guess most walmarters use cash...) So that was another 15min wait. I walked out with my items over an hour after entering.

[TBoneTX 45,324]

or shop there. I've been walmart free for nearly a year. I realize now how the silly the place is. I ordered a heater from there and it took walmart 30 min just to clear it from the system so i could take it. I then ran and grabbed a can of spray and got in the queue. After waiting 15 minutes, I got to the front and the debit card machine stopped working. Instead of taking care of the issue the woman told me to go to another line (I guess most walmarters use cash...) So that was another 15min wait. I walked out with my items over an hour after entering.

This, plus the reality that out of (what) a couple of dozen checkout registers, fewer than half are ever open; and the employees are zombies at best, but usually surly or even hostile.

[I AM NOT THAT GUY 5,715]

This, plus the reality that out of (what) a couple of dozen checkout registers, fewer than half are ever open; and the employees are zombies at best, but usually surly or even hostile.

Wow! We must be lucky that our closest one is the "Friendly Windsor Walmart".

[Rebecca Jo 1,962]

A "living wage" is argumentative depending on where we are talking.

In NY/California, yeah the wage isn't exactly up to par. In places with a low cost of living, they are perfectly fine.

Paul, I live in western West Virginia, on the border of Ohio. Not Appalachia and not coal mine country, as is the image many people have of my state. The area I live in is very "mid-westernish" and the cost of living is relatively low. You can purchase a decent home in this area for 90K - a very nice home for 175K. Commutes to work are not long for most people - 30 miles would be very far.

Even in this area, no one can live on $7.25 an hour. The article talks about a rate of $12 per hour. $12 per hour is 25K per year. Two people earning $12 per hour is a 50K per year household.

I don't know where you live, but even in this area, $50K per year isn't living on easy street. It's enough to buy a decent car and make a mortgage payment.

I would say the definition of a living wage isn't so much about where you live, as what you define as "living". Even here in this little bastion of fringe mid-western living, 50K per year will just get you by. You won't be saving much and you'll still be living paycheck to paycheck. Hardly the American Dream, I'd say.

$12 an hour would be pretty high bucks in some states.

It's not even "high bucks" around here.

Edited April 23, 2011 by Rebecca Jo

[Pooky 3,787]

The net loss of jobs would be questionable by area.

Only in the number of jobs lost, not in the loss itself.

[Karee 4,190]

Paul, I live in western West Virginia, on the border of Ohio. Not Appalachia and not coal mine country, as is the image many people have of my state. The area I live in is very "mid-westernish" and the cost of living is relatively low. You can purchase a decent home in this area for 90K - a very nice home for 175K. Commutes to work are not long for most people - 30 miles would be very far.

Even in this area, no one can live on $7.25 an hour. The article talks about a rate of $12 per hour. $12 per hour is 25K per year. Two people earning $12 per hour is a 50K per year household.

I don't know where you live, but even in this area, $50K per year isn't living on easy street. It's enough to buy a decent car and make a mortgage payment.

I would say the definition of a living wage isn't so much about where you live, as what you define as "living". Even here in this little bastion of fringe mid-western living, 50K per year will just get you by. You won't be saving much and you'll still be living paycheck to paycheck. Hardly the American Dream, I'd say.

It's not even "high bucks" around here.

Have you learned to play the Banjo?

[Peikko 1,575]

A "living wage" is argumentative depending on where we are talking.

In NY/California, yeah the wage isn't exactly up to par. In places with a low cost of living, they are perfectly fine.

A living wage is certainly not argumentative. Arguable possibly, but not argumentative.

I'm guessing you get on quite well on $7.00/hr, but don't put off saving for your retirement forever you know, when you get of age you may find you regret abolishing Medicaid and SS.

[mawilson 2,133]

I don't know where you live, but even in this area, $50K per year isn't living on easy street.

I call BS.

I know some people in NYC who make $50K per year. Living paycheck to

paycheck - perhaps, but not exactly "struggling" to put food on the table.

[Peikko 1,575]

I call BS.

I know some people in NYC who make $50K per year. Living paycheck to

paycheck - perhaps, but not exactly "struggling" to put food on the table.

If you live paycheck to paycheck how do you go about ensuring you don't become a burden on society when you can no longer work? Sure, these folks are not starving today but that's not exactly going to help when the paycheck stops.

[mawilson 2,133]

If you live paycheck to paycheck how do you go about ensuring you don't become a burden on society when you can no longer work? Sure, these folks are not starving today but that's not exactly going to help when the paycheck stops.

Good question. A better question is, how much do you need to save to make sure

you don't become a burden.

Is $50/month going to be enough? $500? $5000?

[Peikko 1,575]

Good question. A better question is, how much do you need to save to make sure

you don't become a burden.

Is $50/month going to be enough? $500? $5000?

That is the only relevant question, one I don't currently have the answer for

I hate having to decide about investments. It's a ###### lottery.

[Rebecca Jo 1,962]

I call BS.

I know some people in NYC who make $50K per year. Living paycheck to

paycheck - perhaps, but not exactly "struggling" to put food on the table.

Who said anything about "struggling" to put food on the table? Is that what a "living wage" means to you? Near poverty?

To me a living wage means enough money to afford decent housing and reliable transportation. It means earning enough so you ARE NOT struggling to put food on the table or gasoline in the car. It means earning enough to afford healthcare coverage and do a bit of saving.

I call BS on your friends in the Big Apple earning 50k and even being able to live paycheck to paycheck. Even if they exist, they are surely single people who live in rentals and don't own a car.

Have you learned to play the Banjo?

Are all your friends LadyBoys?

[wshc 46]

Don't take this the wrong way, but Walmart should be commended for hiring so many people that would not even get an interview at the progressive companies (which don't pay a living wage either.) Target is one example of such a progressive store.

Edited April 23, 2011 by wshc