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Why Walmart's Plan to Pit Low-Wage Workers Against Low-Wage Consumers Is Failing

Black Friday is the day when many Americans find refuge in the corporations that squeeze them out of the middle class. Black Friday deals, which offer you that one-day opportunity to get the most bang for your small buck, is good enough to wait in line for at dawn or even leave Thanksgiving dinner early — this year as early as 6pm.

That’s why it’s tricky for corporations’ financially burdened workforce to ask consumers not to shop in the same stores that help keep many of them destitute, which is what Walmart workers at 1,500 stores will be doing this Black Friday. After all, when you’re left fighting over crumbs, it’s difficult to realize that Walmart snuck off with the whole pie.

Walmart and its supporters boast that if the corporation were to pay its workers more, it would have to raise prices for consumers. A few months ago, when Walmart refused to open three stores in Washington, D.C. if proposed living-wage legislation passed, a general manager lamented that paying its workers a living wage “would result in fewer jobs, higher prices and fewer total retail options.”

But a new report by public policy organization Demos reveals that Walmart could raise its workers' wages without costing consumers a dime. The report, titled “A Higher Wage is Possible: How Walmart Can Invest in Its Workforce Without Costing Customers a Dime,” found that Walmart could raise wages by $5.83 per hour without raising prices. The report revealed that Walmart spends $7.6 billion annually buying back shares of its own stock. Amy Traub, co-author of the report, said share buybacks are “Wall Street financial maneuvers” that are unproductive, and often fail, in the long run, its goal of making its shares worth more. The report quotes a Wall Street Journal business analyst, who wrote:

The evidence overwhelmingly shows that heavy buyback companies usually create less value for shareholders over time… Many managements have become so infatuated with how buybacks increase earnings per share that these distributions are crowding out sound business investments that create more value over time.

Traub said that if Walmart reinvested these billions of dollars in its workforce instead, it would be beneficial to its workers as well to as the economy as a whole.

Read the full brief: A Higher Wage Is Possible