Wal-Mart Is Having a Very Bad Week
Wal-Mart Stores Inc. is not having a good week.
On Monday, the National Labor Relations Board announced it was backing a complaint against Wal-Mart that alleges it retaliated against employees for organizing activities. Meanwhile, word spread that a Wal-Mart in Canton, Ohio, was holding a food drive for its own workforce. I'm picturing the head of public relations at Wal-Mart draped across a fainting couch with an ice pack pressed to the weary brow, smelling salts clutched between bloodless fingers.
In both cases, the stories may not be as bad as they sound. Although Wal-Mart did fire 23 workers, which the NLRB says was illegal retaliation, some of the "organizing activities" seem to include freelance strikes by people whose workplace doesn't actually have a union yet and crashing a shareholder meeting in Bentonville, Ark. These are not exactly traditional "retaliation" cases.
And the drive in Canton is soliciting food from other Wal-Mart associates, which tends to undercut the narrative that they're all too immiserated by their low wages to buy a turkey. An associate said she was previously helped by the program when the father of her four children went to prison, costing her $500 a month in child support.
Should Wal-Mart pay enough to raise four children without help from the father? And, if so, how much would that be? What's the minimum it takes to raise four kids on your own? Various calculations I've seen show a long-time, full-time associate working 37 to 38 hours a week for around $11.50 to $12.50 an hour, which is $22,000 to $25,000 a year. It's hard to see getting that to a level where you could comfortably raise four kids without needing some kind of assistance from family, charity or the government.
At least, not without a better market for American labor, and the goods and services that American labor provides. General Motors Co. is, after all, what happens when you have a strong union and a weak market for your products. Here in Washington, after much fighting, Wal-Mart just opened its first two stores. There were 23,000 applications for 600 jobs.
What happens to those low-skilled workers if we try to force Wal-Mart to knock off the food drives and pay their workers much more? Some of them would be better off. But the higher wages might cause Wal-Mart to cut staffing levels -- and might draw in higher-skilled workers from other sectors. Many of the desperate folks who flooded Wal-Mart with applications might end up unemployed.
The fundamental problem with Wal-Mart wages is not Wal-Mart wages. The economy has always had lower-wage jobs, often filled by housewives and teenagers who weren't yet responsible for supporting themselves. For most of the 20th century, retail jobs were designed for people who didn't intend to be permanently supported thereby -- often young women on the way to marriage.
The problem is that there are too few of the better-paying permanent jobs held by the future husbands of those latter-day shopgirls -- the decent-paying, higher-productivity jobs that used to support the bottom tiers of America's middle class. When Wal-Mart jobs are all you can get, their low pay goes from annoying to enraging. Unfortunately, we won't fix that problem by yelling at Wal-Mart.
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Megan McArdle at email@example.com