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Walmart Could Actually Benefit From Minimum-Wage Hike

Huffington Post

President Barack Obama wants workers to make more money. Walmart and other low-wage employers also want to make more money.

They could both get what they want if the federal minimum wage goes up.

While there's little research on the effects of a minimum wage hike on company profits in the U.S., some studies suggest that raising the minimum wage during an economic downturn could boost sales at companies like Walmart that serve low-income shoppers.

"Walmart caters to workers on a budget and they can expect that if those workers get an increase, they will spend the money in their stores," Catherine Ruetschlin, a policy analyst at Demos, a left-leaning public policy organization, told The Huffington Post. "These low-wage workers are the real job creators in the economy; they’re the people that go out and spend.” [...]

Some conservative economists and other employers who have resisted paying their workers more say the laws of supply and demand dictate that higher wages will lead to less hiring and more firing, worsening the plight of low-wage workers. Better a low-paying job than no job at all, this view holds.

But the economics of the minimum wage may be more complicated than a simple supply-demand curve. David Cooper, an economic analyst with the left-leaning Economic Policy Institute, agrees with Demos's Ruetschlin that the sluggish economic recovery means a boost in the minimum wage could push low-income workers to spend more, and in many cases they’d spend that money at low-priced outlets like Walmart.