Originally published in the Current Newspapers, July 31, 2013.
The ongoing battle between Walmart and workers is about the role that workers play in our city and our nation. We need to ensure that workers also benefit when economic growth continues and corporations produce more profit, higher stock prices and ever-escalated CEO compensation. The fight over Walmart is not about a better minimum wage. It’s about livable wages, and the role of Walmart in the economy. We need profitable, efficient companies like Walmart to pay decent wages, and taxpayers shouldn’t be subsidizing them when their CEOs and other top executives are making hundreds of millions of dollars a year.
As America’s largest company, Walmart has a huge impact. Not just in Washington, D.C., but in every community with a Walmart. Walmart brings down wages everywhere. Its low wages require public subsidy of its workers, since Walmart workers make so little that they must rely on Medicaid and other public assistance programs to make up the difference between their insufficient salaries and what it really costs to make ends meet.
Walmart can afford to pay workers more. The Walton family has a combined wealth greater than the bottom 48.8 million American families combined — 41.5 percent of all U.S. families. One of Walmart’s closest competitors, Costco, pays an average wage of about $20 per hour. Walmart could pay its top executives less and pay workers more, or it could raise workers’ wages and still make plenty of money for the Walton heirs by passing costs on to consumers. Researchers at the University of California at Berkeley figured out that if every Walmart in the U.S. had a minimum wage of $12 per hour and passed the entire additional cost on to consumers without taking anything out of Walmart’s profit margins, it would increase prices by a mere 1.1 percent, or $0.46 per shopping trip for the average Walmart shopper.
How do we convince Walmart to have better pay practices? Walmart’s quest to enter urban markets like D.C. gives leverage to those of us who think that someone who works hard all day should make enough to live on. That’s what this fight is about. It’s about the degradation of work in America. Americans want to work hard and make a livable wage. We need an economy where work pays. If Walmart paid workers a living wage, it would have a positive impact on many workers in other companies and in many sectors. Walmart’s efficiencies mean it can pay decent wages and provide decent working conditions while still being able to provide low prices. But it doesn’t. Instead, Walmart has been a leader in driving down wages for workers.
The Walmart case shows how far we have let corporate notions of fair pay for ordinary workers become divorced from real-world living conditions. The $12.50 per hour wage that the company is refusing to pay its workers would equal $26,000 per year before taxes for a full-time worker. This is far below the $70,235 necessary for a one-parent, one-child family to have true economic security. For a two-parent, two-child family in the D.C. area, it costs $88,615 to secure a decent yet modest living.
Paying workers a decent and livable wage is the best way to get equitable growth and a more rapid and sustained recovery. Taxpayers should not have to subsidize healthy and growing businesses.