Impact of Walmart’s wage raise
The United States’ largest employer, Walmart, announced recently that they will be laying off 7,500 of their 2,300,000 employees with the closing of 63 Sam’s Club stores. At the same time, they will also be raising their employee’s minimum wage from 10 to 11 dollars an hour.
The news of the raise seems to counter the bad news of the layoffs; however, in 2014 Randy Hargrove, a Walmart spokesperson stated, “More than 99 percent of our associates earn above minimum wage. In fact, the average hourly wage for our associates, both full and part-time, is an average of $11.83 per hour.” This statistic leaves the good news irrelevant for the average worker already made 83 cents more than the raise.
Thousands of people losing their jobs is really only the tip of the iceberg for the negative impact Walmart makes every year on the local, state and national economies. The organization, Americans for Tax Fairness, claims that every Walmart Supercenter “cost[s] taxpayers between $904,542 and $1.75 million per year, or between $3,015 and $5,815 on average for each of 300 workers,” from the cost of public assistance. Forbes reported in 2014, Walmart cost the United States around $6.2 billion for the public assistance needed for its workers to survive, from subsidized housing to food stamps.
For reference, Walmart’s net income in 2014 was 15.92 billion, so if they were to pay their employees enough to be able to live, they would still net around 9.72 billion. In the same year Walmart’s two largest competitors, Amazon and Target, profited 241 million dollars and 2.69 billion dollars respectively. Walmart, if they had paid their workers the extra 6.2 billion dollars, would have still earned more than three times their next major competitor in that year. Not to mention that the CEO of Walmart is estimated to earn more in an hour than a single Walmart employee will make in a year, continuing a trend of corporate greed.
On a more local level, the opening of a Walmart store in a county, contributes to a reduced county level employment by about 150 workers or 2.7 percent and a decline in earning of about 1.5 percent, according to an article published in the Journal of Urban Economics, as the smaller locally owned grocery stores are forced to compete with the large chain. The local stores are not able to lower their prices to meet those of Walmart and are forced to close their stores. This causes a ripple effect as those local stores close the suppliers they buy goods from are left without a buyer.
For example, if a local orchard, that is out of the way for the consumer, sold their apples every year to the local grocery store, when the store closed the orchard was left trying to sell their apples directly to the population. Yet if unsuccessful, they too are forced to close their orchard and terminate the jobs. The trend happens repeatedly with all the small producers that local economy once supported, leaving the community with less jobs and diversity for the consumers.
Through and through, the convenience of the one-stop-shop of Walmart is polluted by the effects it has on the surrounding community. Instead, go and seek out the local farmers markets, the local grocery stores, if not for supporting your community but for the superior quality of goods themselves. I swear they taste better knowing you are helping your fellow members of society and not some overarching corporation.
Kialeigh Marston, a sophomore, studies political science and classical languages. She is a staff writer for Le Provocateur.