The astonishing news that Wal-Mart is in favor of a hike in the minimum wage is not so strange when you think about it.
It turns out that Wal-Mart’s economic impact — the massive loss of American jobs since Wal-Mart started using cheap Chinese manufacturing, their low wages and lack of benefits, their destruction of small businesses where Wal-Mart stores spring up — is in part driving this change of heart.
You see, people who make only minimum wage, such as Wal-Mart’s own employees, can’t afford to shop at Wal-Mart.
By supporting a higher minimum wage, Wal-Mart hopes to keep their own sales figures from slipping.
…Wal-Mart is bumping up against a serious problem at least partly of its own making: Because it pitches its products to a disproportionately low-income clientele, its revenue rises and falls with the fortunes of the lower end of the American working class.
And those fortunes these days are anything but bright. The coming crunch in heating oil prices, the decimation of American manufacturing, the steady decline of median family incomes over the past several years, the failure to raise the federal minimum wage since 1997 and the fact that Wal-Mart is setting the pay standards for millions of American workers — all these are combining to limit the ability of Wal-Mart shoppers to buy as much as they used to. While sales at the Neiman Marcus end of retailing have been doing just fine, the working-class money crunch is taking a real toll in Wal-Mart-land.
Wal-Mart, could, of course, raise its workers’ wages, but Scott has dismissed that out of hand. So now it’s the feds’ responsibility to rescue Wal-Mart from the consequences of the low-wage, low-consumption economy that Wal-Mart, with such fanatical devotion, has created. For, in Wal-Mart’s America, it’s not clear that even Wal-Mart can thrive.