Fixated on Wal-Mart: Low Wages Harm America’s Economy

October 21, 2013 | | Epoch Times |

Washington D.C. Mayor, Vincent C. Gray vetoed legislation demanding that large retailers pay a higher minimum wage, Sept.15. The announcement came on the heels of Wal-Mart threatening to cancel plans for new stores in the District of Columbia if the minimum wage was increased.

Mayor Gray denied that he vetoed the minimum wage because of Wal-Mart’s threat in his weekly radio address.

The debate in the District of Columbia is indicative of a more pressing national issue: Paying workers a decent salary instead of a wage that essentially forces them to apply for welfare benefits from the U.S. federal and local governments. [...]

Low-Wage Effect on America’s Workforce

According to a report by the Democratic staff of the U.S. House Committee on Education and the Workforce, depressed wages, such as those paid by Wal-Mart, not only keep the workforce at or below the poverty line, but also result in substantial cost to the taxpayer.

“As the largest private-sector employer in the U.S., Wal-Mart’s business model exerts considerable downward pressure on wages throughout the retail sector and the broader economy,” the report stated. The updated version of 2004 report was published in 2013. 

Data regarding Wal-Mart’s wage and employment practices are not readily available to the public.

However, according to the report, “a single 300-person Wal-Mart Supercenter store in Wisconsin likely costs taxpayers at least $904,542 per year and could cost taxpayers up to $1,744,590 per year – about $5,815 per employee.” 

The report accuses Wal-Mart of holding down earnings not just for Wal-Mart, but for the entire retail industry. As the largest of America’s retailers, the company could be a role model for the rest of the industry. 

Furthermore, a 2012 report by Demos, a public policy organization, said that if more people were hired full time and received an annual wage of around $25,000, the U.S. Gross Domestic Product (GDP) would increase by $11.6 billion to $15.2 billion.

The report found that this would also create over 100,000 jobs.