Market Economy: Wal-Mart has decided to give 500,000 workers a $1 billion pay raise by boosting its basic rate to $9 an hour in April and to $10 by February. And imagine this: It didn't need government to do it.
The retail giant should be Exhibit A in the argument against imposing a one-size-fits-all minimum wage straitjacket on the U.S. economy.
It's raising wages for workers not because it wants to be nice, but because the market for people who can do Wal-Mart jobs has tightened in recent years as modest job growth has been restored to the economy.
The reason for this? In a word, competition.
"Competition helps everyone get the best deal," wrote Mitchell Tu at the Heritage Foundation's Daily Signal blog. "Consumers flock to Wal-Mart because it offers products at competitive prices; investors buy Wal-Mart stock because it earns competitive profits; and workers will apply for jobs at Wal-Mart because it pays competitive wages."
Exactly. Competition is the greatest force for good in a market economy. It keeps everyone honest. Only when government interferes with fair markets do outcomes get skewed. Now that Wal-Mart's wages are going up, can Target and others be far behind?
By contrast, when federal or state government requires businesses to pay a "minimum wage," it destroys jobs and removes from the job market minorities and unskilled young people most in need of work experience and training.
That's not an opinion, but a well-established pillar of modern economic thought. That minimum-wage proponents don't understand it is a pity.
Sure, everyone likes the idea of paying low-wage workers more. But let's look at what happened the last time it happened, in 2007. Democrats in Congress passed a series of minimum-wage hikes that lifted the basic wage 41% from $5.15 an hour to $7.25 an hour.
Two economists at the University of California, San Diego looked at the results of that move. In states where wages were already high, there was little impact. But in low-wage states, the impact was huge.
Indeed, the UCSD study found that the minimum-wage hike, separated from the effects of the financial crisis, cost the economy 1.4 million jobs. And it may have played a big role in the surge in U.S. poverty rates.
President Obama and Democrats have called on Congress to raise the federal minimum wage from the current $7.25 an hour to $10.10 an hour.
That's a 39% increase that the nonpartisan Congressional Budget Office estimates would cost as many as 1 million jobs if put in place.
Americans should know this. A minimum-wage hike sounds nice, but it destroys jobs by placing a government tax on hiring young, uneducated, minority and low-skilled workers. Wal-Mart and other companies have a better answer. It's called competition.
Coffee is 55 cents at the BK....McD raised their coffee to75 cents....they can kiss my ass...lol
Now as for Wal Mart...Not a fan of their employee's...the old ones love to fuxxck with you on price matches...
The young ones don't care...they will match anything...
My wife makes me seek out only young cashiers...lol...