Walmart’s Real Business Plan

I see that Walmart threatened to move out of Washington, D.C. if the city raised its minimum wage to 12.50.

The D.C. council raised it anyway.

Bravo to D.C. for calling Walmart’s bluff. Let’s hope the Mayor signs the measure; evidently, he’s expressed some concerns, since Walmart was proposing to create jobs and to expand into neighborhoods currently underserved by retail.

Those neighborhoods deserve to be served, and jobs are important–but are they worth $6000 of taxpayer subsidy for each person Walmart employs? Because that’s what the research shows: for every job Walmart creates, taxpayers are filling the gap between the low wages being paid and what workers need to survive. Walmart employees are overwhelmingly dependent upon the social safety net for food, housing and medical care.

Walmart has a great business plan: Those of us who pay taxes subsidize Walmart’s costs of doing business. So long as they can get away with paying below-subsistence wages, our tax dollars will continue to fatten their bottom line.

Defenders of these rapacious business practices defend Walmart by pointing to the low prices of their merchandise. Low prices benefit consumers, particularly poorer consumers. But keeping prices low does not require paying poverty wages.

Look at Costco.

 The big box store most famous for its stockpiles of toilet paper and $1.50 hot dogs also has a reputation for paying its workers a higher wage than most of its competitors. The average Costco worker made about $45,000 per year, Fortune reports. By comparison, Walmart-owned Sam’s Club, a Costco competitor, pays its workers $17,486 per year, according to salary information site….Costco’s insistence on treating its workers well hasn’t come at the expense of the company’s bottom line. The retailer’s profit jumped 19 percent to $459 million last quarter, while Walmart’s sales suffered during the same period.

So that claim about helping low-income shoppers by offering bargain prices doesn’t fly–Costco manages to keep prices low (and profits high) without screwing over its employees. Or  picking the pocket of the taxpayers.

Washington, D.C. should take a leaf from my mother’s book. When I was a little girl and threatened to run away from home, she’d offer to make me sandwiches for the trip.