In his column “Return of the Gilded Age”, Gil Smart observes:
“Yes, I accept the argument that a Wal-Mart decision to boost employee pay would erode the firm’s profit margin, and ultimately could make its operations unprofitable.
“But what conservatives must understand is that a populace with no buying power will not buy. Even Wal-Mart itself is discovering this, perhaps reaping what it has sown. In August the company reported a surprise decline in quarterly same-store sales…”
“Understand, this is not a call for government action. Many progressives favor hiking the minimum wage. I would prefer to see a little enlightened self-interest on the part of the economic elite, a broader willingness to accept less, so that others might have more.”
WATCHDOG: WalMart operates in a competitive market place. Thus it must keep its expenses down in order to earn a profit.
On the other hand, society can achieve a fairer division of earnings by increasing the minimum wage. Then WalMart and others will be paying higher wages but still be competitive since competitors will also be paying the same higher minimum wage.
Let’s not expect companies to voluntarily do what society should achieve through law. That is why we call ourselves a democracy (or a republic, if you prefer), not a church meeting.
A minimum wage edict is a barrier to youth employment and an invitation to greater automation. It is quite possible a concentration of family units is happening as younger people are unable to find decent jobs and move from the nest. It was common in the past that more than one generation would share a home and pool resources to make ends meet.
EDITOR: Minimum wage in inflation adjusted terms is at a historic low point.