Peter Schiff Explains Impact of WalMart Wage Increase

[tskeeter]

Bottom line:  Higher prices and fewer jobs for low income/low skilled workers at WalMart.

finance.yahoo.com/blogs/talking-numbers/three-reasons-why-wal-mart-s-pay-raise-will-hurt-the-poor--schiff-233642608.html

The same outcomes are likely as minimum wages are increased across the country.

As the cost of labor around the world has been increasing, it has become cost effective for businesses to return some low skill manufacturing jobs to the US.

Increasing wages makes those low skill level employees less competetive in the world labor market, and will drive some manufacturers back off shore.

[zibazinski]

I'm actually thinking that the marginal employees will find themselves unemployed now because it's one thing to pay 7-8 bucks an hour for someone basically breathing but if you're now going to pay 9-10 bucks an hour, you're going to need to do more than take up space. 

[Deleted]

I can get paid 8$ an hour to take up space? 

[zibazinski]

Retail, yes?

[Deleted]

So you actually have to do something... Nah, I was thinking I'd just basically breathe.

[bean29]

I don't think Walmart would have ever announced the across the board increase if they already were not experiencing the need to pay more $$ to get the workforce they need.

I live in a community were development is going gangbusters. We have had major retail after major retail development, and they also are developing several industrial office parks.  Now they scored a regional medical center. Do you think that will drive up what retail needs to pay?

The sheer number or retail stores moving in already has driven up retail wages in my city...and I am sure it will radiate outward.

[tskeeter]

Feb 20, 2015 14:17:47 GMT -5 bean29 said:

I don't think Walmart would have ever announced the across the board increase if they already were not experiencing the need to pay more $$ to get the workforce they need.

I live in a community were development is going gangbusters. We have had major retail after major retail development, and they also are developing several industrial office parks.  Now they scored a regional medical center. Do you think that will drive up what retail needs to pay?

The sheer number or retail stores moving in already has driven up retail wages in my city...and I am sure it will radiate outward.

I agree with you, Bean, that WalMart is bumping their pay rate in part because they can't hire enough of the right caliber people for what they have been paying.  (I suspect part is also in response to the bad press they have gotten about their pay rates for several years.)

I also expect that WalMart will demand a higher level of performance from their employees.  I remember talking about the impact of an increase in minimum wage with my boss many years ago.  He was completely unconcerned about the impact paying servers more money would have on the profitability of his restaurant.  Basically he told me, it won't make any difference.  I'll just hire one less server and the remaining servers will just have to work a bit harder to keep up.  So, increasing the minimum wage reduced the local employment pool by at least one job.  It also made the boss more inclined to weed out marginal performers more quickly.  He simply spent less time and effort trying to help poorer performers come up to speed.