Editor’s Note: Wal-Mart responds to market
Wal-Mart is raising the minimum wage of 500,000 workers nationwide by $1 an hour, not in response to pressure from activists, but because it is having trouble hiring and retaining employees in an increasingly competitive labor market.
The retailer is a favorite target of malcontents of every ilk, and has been attacked for everything from predatory pricing to underpaying its workers.
But don’t score this as a victory for the protesters. Wal-Mart, like other businesses, is responding to the market. The unemployment rate dropped a full percentage point in January and now stands at 5.7 percent. Meanwhile, job openings increased by 1 million nationwide in December.
Fewer people looking for jobs combined with more jobs being created is driving up the demand for labor. And when that happens, wages go up.
That should be a lesson for those who favor government-mandated hikes in the minimum wage. Job-creating growth is the surest way to increase wages.
Wal-Mart’s fanatical critics are not likely to ease off, even with the big hike in hourly pay. They’re still demanding the retailer pay a $15 minimum wage. If that’s what they want, they should be pressuring the Obama administration for more pro-growth policies, including loosening regulations and lowering taxes on businesses like Wal-Mart.
The fastest way to a $15 an hour minimum wage is to create a scarcity of minimum wage workers.