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Published:May 5th, 2008 14:15 EST
Wal-Mart Should Stimulate Economy by Raising Wages for Its Employees

Wal-Mart Should Stimulate Economy by Raising Wages for Its Employees

By SOP newswire2

A recent study shows that Wal-Mart is well positioned to stimulate the weakened economy and help its employees live better - by raising its minimum wage to $10 per hour - with little financial impact on most shoppers.  

"Wal-Mart`s stock price, revenue and profits are rising as it benefits from the weakened economy, but its employees are not sharing in the benefits," says David Nassar, Wal-Mart Watch Executive Director. "Instead of solely focusing its efforts to persuade shoppers to spend their tax rebate checks at Wal-Mart, the company should invest in helping its nearly 1.4 million employees across the country - many who live well below the federal poverty level - by paying a better wage and helping them live better during these tough economic times," he adds. "Just a small increase could make a big difference for many of Wal-Mart`s employees."

Tomorrow, Wal-Mart Watch will host a lunch event featuring Ken Jacobs, Chair of the University of California Berkeley Center for Labor Research and Education.  Jacobs is the author of a recent study, "Living Wage Policies and Wal-Mart: How a Higher Wage Standard Would Impact Wal-Mart Workers and Shoppers."  

The study shows that Wal-Mart could increase its minimum wage to $10 per hour and greatly boost the well-being of its low-income workers with little financial impact on most shoppers.  Even if Wal-Mart fully passed on costs to consumers, the average impact on a Wal-Mart shopper would be a 0.9 percent increase in product prices.  

In addition, the study finds that nearly half (46.3%) of the wage income gain would accrue to workers living below 200% of the federal poverty level, while less than one-third (29.3%) of the impact of the price increase would be borne by shoppers with incomes below 200% of the federal poverty level.  Poor and low-income Wal-Mart workers could expect to earn an additional $1,020 to $4,640 a year in pre-tax income, depending on what they earn now and whether they work part-time or full-time.

The study uses data from statistician Richard Drogin`s analysis of Wal-Mart payroll data, the March 2005 U.S. Current Population Survey, ACNielsen`s U.S. Homescan Consumer Panel data about consumer attitudes and loyalty and Wal-Mart`s own data on U.S. sales and customers.

The report`s authors include Jacobs, researchers Arindrajit Dube and Dave Graham-Squire of the UC Berkeley Labor Center, and Stephanie Luce, an associate professor and research director at the University of Massachusetts, Amherst Labor Center.

NOTE: Ken Jacobs can be reached directly at (510) 643-2621 or kjacobs9@berkeley.edu.
 

Paid for by WalmartWatch.com, a campaign of Five Stones and The Center for Community and Corporate Ethics