Right Hooks

Wages Lead to Trouble in Walmart-Land

The retail giant is tweaking its business model.

Dan Gilmore · Jan. 26, 2016

Walmart has announced that it’s closing 154 stores, most of them the company’s Express stores operating in small communities. After moving into rural communities, and often choking out independent small businesses, Walmart is tweaking its business model. The reason? The rising cost of wages has overtaken the profit margins of those stores. On one hand, Walmart raised wages to keep workers, but it also announced the move in response to political pressure to raise the minimum wage. $15 an hour, anyone? The company also backed out of establishing stores in the District of Columbia, making the city’s liberal politicians “blood mad.” After all, the stores would have created jobs in some of the city’s poorest neighborhoods, while providing options for residents to buy groceries and goods. This led the editors at Investor’s Business Daily to write, “Sorry, but forcing employers of unskilled, largely untrained labor to pay higher prices for their labor is a recipe for automation, layoffs and no job creation. It punishes the poor, unskilled and uneducated most of all. The leftist demagogues who push this nonsense should be ashamed.” And liberal politicians wonder where the jobs have gone.

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