by Randolph T. Holhut
Chief of AR Correspondents
February 21, 2013
THE MINIMUM WAGE SHOULD BE A LIVING WAGE
DUMMERSTON, Vt. -- Walmart is in an advanced state of freakout right now. Why? Because sales have been way down at the nation's largest purveyor of cheap Chinese crap.
Bloomberg News recently obtained some internal emails from a Walmart executives that showed the extent of the freakout.
"In case you haven't seen a sales report these days, February (month-to-date) sales are a total disaster," wrote Jerry Murray, a Walmart vice president who works in the U.S. logistics division, on Feb. 12. "The worst start to a month I have seen in my seven years with the company."
Cameron Geiger, senior vice president in charge of U.S. replenishment (the department that moves the cheap Chinese crap from distribution center to Walmart stores), confirmed in a Feb. 1 email that January was just as bad.
"Have you ever [had] one of those weeks when your best-prepared plans weren't good enough to accomplish everything you set out to do? Well, we just had one of those weeks here at Walmart U.S. Where are all the customers. And where's their money?"
The official company line is that the end of the Social Security payroll tax break, plus delays in tax refunds, are to blame for the poor sales.
But the problem may be something bigger.
For many lower-income customers that are Walmart's bread-and-butter, the recession has never ended. Between rising food and energy prices and paychecks that are too small to cover even the necessities, many can't afford to shop there anymore.
The American economy is now structured to be a low-wage economy, and the only ones profiting from this setup are the wealthy and corporations.
According to the National Employment Law Project, two-thirds of the 30 million low-wage workers in the United States work for large corporations such as Walmart and McDonald's. Many earn the federal minimum wage of $7.25 per hour with little or no benefits.
There are Walmarts and McDonald's in other countries where workers are paid the minimum wage. But in Australia, the minimum wage is more than US$15 an hour. In France, it's more that US$11 an hour. In Ontario, Canada, it's US$10.25 an hour. And in all three nations, all citizens have health insurance.
The last time the minimum wage constituted a living wage in this country was in 1968, Adjusted for inflation, the minimum wage would need to be $10.56 an hour to equal the buying power that a minimum-wage worker had in 1968. And if the minimum wage rose in step with gains in worker productivity over the past 45 years, it would be over $16.50 an hour today.
Or, looking at it another way, over the past 45 years, the pay of CEOs has gone up by 900 percent, while the pay of minimum wage workers has lost 50 percent of its value.
Yet there is a great fuss by conservative politicians and their wealthy supporters over President Obama's too-little, too-late proposal to raise the minimum wage to $9 by 2015. Even though the meager raise to $9 would mean a pay increase for 15 million workers. according to the Center for Economic Policy and Research, it would have little impact on employment.
But if the minimum wage was $10.50 an hour, it would have a real and significant impact on the lives of lower-income workers, while adding mere pennies to the bills of better-off consumers for goods and services.
Better-paid workers tend to be more productive, and stick around longer. There's less churn in the workforce, so it lowers recruiting and training costs. Most importantly for the economy, according to a recent paper from the Economic Policy Institute, better-paid workers will spend their money and keep others working as consumer demand increases.
In other words, lower-income people might be able to afford a trip to Walmart again. But it appears a lot of American politicians don't believe America's low-wage workers aren't as good as and deserve as much pay as French, Australian and Canadian workers.
Raising the minimum wage is an absolute no-brainer. Recent polling shows more than 70 percent of Americans support a higher minimum wage, as well as the proposition that a person who works full-time should not be living in poverty.
It's not just about politics. It's about human decency and honoring the value of all workers. That is why It's time to make the minimum wage a living wage again.
AR's Chief of Correspondents, Randolph T. Holhut, holds an M.P.A .from the Kennedy School of Government at Harvard University and is an award-winning journalist in New England for more than 30 years. He edited "The George Seldes Reader" (Barricade Books). He can be reached at email@example.com.